Bombardier CEO “proud” at A220 FAL groundbreaking

Jan. 16, 2019, © Leeham News, Mobile (AL): Groundbreaking for the Airbus A220 final assembly line today might be viewed as a bittersweet moment for Alain Bellemare, CEO on Bombardier, designer of the C Series.

Airbus Group CEO Tom Enders at the A220 FAL groundbreaking in Mobile (AL). It’s his last one with Airbus., He retires in April. (Scott Hamilton photo.)

The program nearly bankrupted Bombardier. A sale of 50.01% of the CSLAP limited partnership to Airbus was necessary to save the program and Bombardier.

Bombardier’s share in the program was reduced to about a third after the Airbus sale. (A quasi-government Quebec pension fund owns the rest.)

But in an interview following the groundbreaking, Bellemare was almost giddy with excitement.

All smiles for the future

“I’m very proud,” he said. “I’m proud for the great product we’ve designed. I’m very proud to see that it’s getting full traction in the marketplace. I’m very proud to see the backlog is so strong. I’m very proud to see that we’re expanding our footprint globally.”

Bellemare said people were asking him in 2015 about the future of the program.

“Here we are four years later. Nobody’s talking about that,” he said. “The backlog is solid. “You’ve got Delta. You’ve got JetBlue. You’ve got Moxy. You’ve got Air Canada. You’ve got Swiss in the backlog. You’ve got Korean Air. And now we are expanding our global footprint by building right here in the US.

“We are very, very proud to have designed this aircraft. Having it under the leadership of Airbus, where we have the expertise and knowledge, they are going to take it to the next level and make something fantastic out of it.”

Bellemare said Bombardier had to do the Airbus partnership to give the C Series a chance for success. The company didn’t have the balance sheet to support the growth of the program.

“We did an amazing job, and now with Airbus, we take it to the next level,” he said.

Market Demand

The Mobile A220 FAL is intended to serve the US market.

Knittel sees the US as the largest market for the A220, which formerly is the Bombardier C Series.

Delta Air Lines now has an order for 90 A220s and options for more. Initial deliveries will come from the former Bombardier C Series production plant at Montreal’s Mirabel Airport, which has been rebranded as an Airbus A220 facility.

The first delivery, likely to Delta, from the Mobile plant is targeted for mid-2020.

JetBlue and “Moxy” Airlines, the working name for a new US start-up, each ordered 60 A220-300s with options.

Knittel, while typically declining to talk about specific campaigns, said Airbus is pursuing orders from other US airlines. The obvious targets are American and United airlines, but Spirit Airlines has previously publicly been mentioned.

Other potential targets would be Frontier Airlines, Alaska Airlines and Southwest Airlines, though these would seem to be long shots.

“We believe between Mirabel and Mobile we have the capacity going forward to satisfy our customers,” Knittel said.

Mirabel expects to produce 10 A220s per month by the mid-2020 decade. Initial capacity of the Mobile plant will be 4/mo.

Market penetration

Knittel said Airbus now has more than 1,500 aircraft in the US. Airbus has 71% of the backlog in Latin America and 57% share of in-service fleet, said Jeff Knittel, chairman and CEO of Airbus Americas.

Over the last two decades, air traffic has doubled in Latin America, he said, with a lot more potential.

In 2017 inter-regional traffic grew faster than domestic travel, Knittel said. Only 20 of largest cities are connected. The prospect of direct, cross-border traffic will drive growth.

He said 2,700 aircraft valued at $350bn in today’s list prices are needed in Latin America over next 20 years.

Airbus is investing in the region to help, he added.

“We’re investing in training and maintenance centers in Mexico, Brazil and Argentina,” he said.

Mobile investment

Groundbreaking for the Mobile A320 FAL was in 2015. Since then, Airbus delivered 103 aircraft from this facility to US airlines. In 2018, Airbus delivered 50 aircraft, exceeding targets. Currently, the production rate is just above 4/mo, and trending toward 5 by the end of next year.

Airbus has 700 jobs today in three Mobile facilities, including an engineering center. There are another  250 with contractors, plus indirect jobs at a ratio of about 5 to one, said Gov. Kay Ivey, who was present for the groundbreaking,.

The A220 FAL will be add about 400 more jobs, plus the supply chain.

“One of the largest markets for the 220 is the US,” Knittel said. “[Mobile] is our industrial base in the US.”

Airbus spent $600m for the A320 FAL. With the 220 FAL’s $300m, Airbus will have invested almost a billion in Mobile. Some of this is offset by state and local tax incentives and cost-sharing by Bombardier.

The Mobile engineering base does global engineering for wings.

Bombardier’s remaining commercial presence

Bombardier’s presence in the commercial airliner business is diminishing.

The C Series program sale was the first step, although it retains a 33% share for now.

In November, the company announced an agreement to sell the Q400 program to Canada’s Viking Air parent.

It also announced simultaneously it is exploring “strategic options” for the CRJ regional jet program.

“What we want to do is build the backlog first,” Bellemare told LNC on the sidelines of the groundbreaking event. “We are working with airline customers to see how we can strengthen our backlog past 2020. We’re working with the supply chain to see how we can take the cost down. We’re doing our part internally to take our costs down. We’re streamlining our operation to make it more efficient and we’re looking at other options to see how we can unleash value.

“The reality is that when I announced we are considering our options, people are really engaged with us positively because they like the aircraft and they especially like the new [Atmosphere] cabin.”

25 Comments on “Bombardier CEO “proud” at A220 FAL groundbreaking

  1. “We are very, very proud to have designed this aircraft.”

    And, so far as I can see, quite rightly so.

    One thing that interests me. Airbus have always made a great thing about the high level of commonality across their range. An A320 pilot can relatively easily transition to flying the A380. Now the C Series is on their books too, that’s gone.

    So the question that interests me, will Airbus convert the C series to an Airbus cockpit, or the other way round? From what I’ve heard C Series cockpit and FBW system is very good indeed.

    So is the real value to Airbus not just the C Series itself, but the presumed access they now have to a very new FBW system?

    It’s going to interesting to see what happens!

    • There is no way Airbus will convert the A220 to the A320 cockpit. I doubt they will change the a320neo either, that variant is just getting through it’s ramp.

      If there is a new A32? with a new wing etc then perhaps that will get an a220 like cockpit.

      • I really get annoyed about this subject.

        No one is going to convert anything to anything of current production.

        The C has concepts that are different that both Airbus and Boeing.

        If Airbus does a new aircraft they might shift to the C series setup.

        What they do if they don’t like it? Back fit it to the then current C series and leave the ones sold kind of hanging?

        I doubt it.

        It all depends on how Airbus does with NIH.

        From what I have read it looks to be a good blend of concepts that would be a good one to adapt in the future.

        Still leave a lack of commonality with all the Airbus aircraft.

        But get this thing rolling the way it needs to and leave it as is.

  2. This is not unlike a startup that’s hitting a wall when reaching a certain size and the current market gorillas are throwing rocks at you. You can either decide to keep 100% and die with it. Or you can keep half (well, a third for BBD, half for me bc I’m a BBD shareholder and future QC pensioner) of a bigger pie. It’s hard but it’s the right thing to do. I would rather have had a perfect world where Boeing didn’t complain to the US gov but, in the end, each country can make their own rules (whether that’s good long term or not is another discussion).

    I bet BBD is looking closely how Airbus is doing the cost cutting for the CSeries (euh, A220) and will likely try to do the exact same thing to the CRJ. There is a poker game there between BBD and suppliers: keep churning out CRJ parts for less or stop building them altogether (I guess it’s a real option).

    • The CRJ production shares a lot of components including fuselage with the Bombardier business jet lines, so is likely to continue for a while.
      Its makes sense for the Japanese builders of the MRJ regional jet to perhaps take on the the CRJ sales and marketing and customer support, as they have zero capability in that area, and leave production/final assembly with Bombardier business jets.
      The MRJ is exactly what a modern CRJ would be, fuselage wider but no large below cargo hold lobe, FBW controls and a new design geared fan engine. A perfect fit to take over the CRJ market and with larger versions as well.

      CRJ fuselage inside width is 2.57m, MRJ is 2.76m – while E jet is 2.74. Which gives the MRJ a direct competitor to the E-jets on the the cabin space for 4 abreast seating.
      Plus the MRJ 70 is scope compliant , while the MRJ90 isnt. ( none of the new E2 jets are), while the wingspan suits existing regional jet gates.

  3. The airlines that liked the DC-9 has a new 3+2 seat light and comfortable aircraft to buy. So AA is not a bad bet once they feel the competition from DAL A220’s vs their contracted CRJ900 and ERJ175 flying. AA Tulsa can tool up for this “DC-9 of the 20th century” and be the major MRO for it in the US.

    • AA might have to hurry up. If the C Series starts becoming a global hit, manufacturing slots could fill up pretty quickly. If AA decide they’re flying the wrong plane currently, doing so late could be severely expensive. I wonder what’s staying their hand? It’s not like anyone out there is looking disappointed with their C-Series acquisitions.

      P&W must be enjoying things at the moment, now that they’re getting manufactuing going properly. Their GTF is on C-Series, A320neo, MRJ, and Embraer; that’s looking very rosy for them indeed.

      • AA has only 28 140 seater MD83s in it’s fleet, ex TWA.
        That’s a bit more seats ,in 2 class with economy plus than Delta has with it’s A220-300.( 130 seats)
        Doesn’t seem like they will be buying any new 5 seaters

    • Hello Claes,

      Regarding: “The airlines that liked the DC-9 has a new 3+2 seat light and comfortable aircraft to buy.”

      American liked the 3+2 configuration of their 140 seat MD80 fleet so much, which peaked at more than 300 aircraft after American acquired TWA in 2001, that it has replaced them with a similar number of 3+3 A319’s with 128 seats, and 737-800’s with 160 seats (currently being refurbished to 172 seats).

      The following is an excerpt from the 11-2-17 Airline Geeks post at the link after the excerpt.

      “Operating more than 300 MD-80s through 2007, American has been announcing plans to retire the aircraft for a while now, but never had announced a date by which the aircraft would exit its fleet.

      The announcement comes shortly after the carrier announced that they were closing their St. Louis, MO. pilot base in Sep. 2018. St. Louis, an all MD-80 base, was acquired as a part of American’s acquisition of Trans World Airlines (TWA) in 2001. Through that acquisition, American’s MD-80 count jumped to an all-time high of 362.

      Over the past few years, American has been replacing the aging, 140-seat MD-80s with the newer, fuel-efficient 160-seat Boeing 737-800s. The airline currently operates 300 Boeing 737-800s and has orders for 100 Boeing 737 MAX 8s. American also has invested in the Airbus A319 with Sharklets to complement its short haul fleet.”

      The excerpt below is from the 2-10-14 Airways post at the link after the post.

      American Airlines’ once massive fleet of McDonnell Douglas MD-80 aircraft is rapidly being retired in favor of more efficient Boeing 737-800 and Airbus A319/A321 narrowbody aircraft.

      As recently as 2008, the subfleet consisted of more than 300 airframes (336 in March 2008). But that figure has steadily been whittled down and today the fleet consists of 162 aircraft.”

      Current Fleet numbers of the above mentioned aircraft according to Wikipedia.

      A319-100 / 128 seats / 127 aircraft / 6 used on order form Frontier
      737-800 / 160 or 172 seats / 304 aircraft / none on order
      737-8 / 172 seats / 20 in fleet / 80 on order
      MD-82 / 140 seats / 1 aircraft / none on order
      MD-83 / 140 seats / 28 aircraft / none on order

      • Most Douglas DC-9/MD-80 operators went to Airbus. At that time there was no real option if you did not buy Boeing, now you have the A220-300 and maybe soon the A220-500 (maybe in the future EASA, FAA certified MC-21’s , if it reliable can do 15-18 flight/day). Still the narrow fuselage 3+3 Boeing 737MAX with modern wings and engines and competetivly prized is surprisingly hard to beat considering the age of its original Type certificate.
        The A220 if you can get it cheap like DAL is quite light, spaceous, comfortable and seems reliable. But in a prize fight the 737-8 and A320neo will win in cost per seatmile once the going get tough when you can fill them over 70%

  4. When we studied the Airbus FAL in Alabama we concluded that there was large room for expansion and common assembly architecture. This reduces cost of manufacturing and overhead. As far as the A220 technology, this aircraft is viewed as state -of- the art in terms of cockpit systems, avionics, environmental control and flight controls. It has an efficient engine. The flight by wire and software have redundancy and added safety. The suppliers on this aircraft have done a nice job in the integration of the vehicle as an entire system. Mr. Bellemare and his team should be proud to bring this program as a milestone of commercial aviation.

  5. I am not often impressed, with myself nor most others.

    The now A220 series is amazingly impressive. Maybe the only similar would be Sweden still making fighters.

    One of the all time accomplishments in Aviation world.

    While different, its in the league with the DC-3 and the 707.

    • >Maybe the only similar would be Sweden still making fighters.
      Assembling from a global supply chain I would guess.

      Which makes me wonder, could even the US still build fighters or modern airlines that were soley US sourced. Only country that could come close but I suspect even they could not do it, least not immediately.

      • I would expect that China’s fighters are very nearly entirely China sourced , although not entirely China designed as much of their technology is reverse engineered/espionage acquired Russian/US work to gain a tech baseline that they have then built on in their own unique ways.

        • I wonder, does that include chips in the electronics, all elements of the engines etc., their own CPU designer etc.

        • Engines are still a big issue for the Chinese, they haven’t reached parity with the Russians yet. The Russians have parity in performance (more or less) with the West, but are trailing in how many hours between overhaul/rebuild/replacement.

          I think the Russians can claim they are the closest to their fighters being 100% Russian.
          There are more countries that could build a fighter themselves (with the emphasis on could) but it would not make economical sense at all. Better to team up with other countries or buy certain parts/technologies.

  6. Very proud ! What about airBaltic ? 1st CS300 promoter and launch customer, more than 60 aircraft ordred… don’t forget us Mr Bellemare

  7. A family history about the CSeries/A220:
    Once upon a time, there are these very poor lower-class parents known as BBD whom gave birth to a brilliant off-spring genius and named it CSeries. They did not hv enough $ to pay the delivery bill to the hospital and even less for feeding+caring the baby afterwards. Planned to worry about the baby care+education expenses later, poor parents tried to seek a loan just to pay for the hospital bill so they can @ least take the baby home. However, loan was initially rejected by the bank officer. In desperation, poor parents quickly found a super-rich but older couples known as Airbus whom are not only willing but actually seeking to adopt a young genius baby due to difficulty conceiving their own @ their age. Adoption agreement quickly reached between BBD and Airbus but surprisingly, bank finally revised their position and authorized the loan for BBD so delivery fm hospital to home is cleared. As BBD knew the super-rich Airbus parents can give CSeries all the growing+education support a baby genius would need beyond simply a hospital bill, BBD, still proud of the CSeries, gave the custody of the genius baby away to Airbus.

    • If you have been in that heart breaking arena you know.

      You can’t give the child what it needs for the best chance at a good life. You rend your soul apart to give that chance to the child.

      Or you drag it down into the abyss with you.

      Its a test of character.

  8. Small correction to the above – wing engineering work is done in Wichita, Kansas, not in Mobile, Alabama.

  9. The unsaid harsh reality came out recently when Airbus publicly stated ambitious cost reduction target for A200. Clearly the backlog is buried with real cost overruns and not profitable. Crusher time for everyone including Bombardier who is supplying cockpit, wing and rear bulkhead.

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