JerseyFlyer wrote:http://m.aviationweek.com/commercial-av ... -cost-cuts
is also interesting:
Airbus is aiming at cutting unit costs by a large double-digit percentage to bring the A220 program, formerly the Bombardier C Series, into profitability. While Balducchi anticipates significant efficiency gains internally as output of the A220 increases, extensive external cost reductions are needed. When Bombardier owned the program, suppliers were able to negotiate contracts that were highly favorable, taking into account perceived program and market risks. With the A220 under its control since mid-2018, Airbus now is trying to leverage the greater negotiating power the company has over its supply chain.
Double digit percentages give us > 10%, large double digit percentages give us ???
Note the article is written in the future tense, so such cuts haven't been achieved yet.
There must be some intense arm twisting going on.
A220 output almost doubled to 33 last year from 17 aircraft in 2017. In the second half of 2018, 20 were delivered. When Bombardier owned the program, 40 aircraft were targeted for 2018, but Balducchi said the lower level of production was “in line with customer commitments and internal targets.” He refused to reveal the production target for this year but said an output of 10 aircraft per month is expected by the middle of the 2020s.
So they will only be at 10/month in ~2025, which seems less aggressive than some here have implied.
Airbus has planned a groundbreaking ceremony for the Mobile final assembly line on Jan. 16, and is investing $30 million to expand the Mirabel facility. Among other plans, a new delivery center is to be opened there by year-end, which will free up two factory positions for preflight and installation work.
I wonder if Airbus will be putting in $30M of its own money, or if CSALP will be funding the delivery center.
With the above knowledge, the big question about the ramp up is now; which investment will bring the most incremental profit? On the A320, on the A220, or on both? I believe Mirabel would incure less costs for a relatively higher increase in production. The current (relatively automated) FAL "part 1" can do 10 -12 / months easily - we just need to complete the "part 2 and 3" facilities, particularly in regard to the current completion bottleneck... Some of this investment is currently ongoing.
As I said earlier, there's lots of reasons to be optimistic about A220, but one has to keep that in its own scale and be careful when comparing a emerging product (A220) to a mature product (A320).
I can see your point that putting money into A220 can produce more new frames quicker, but each one sells for a lot less than an A320 does (especially given A220 launch pricing done by BBD under duress) and each A320 will make more money (the supply chain scaling effect shows itself yet again, plus there's lots of evidence that A220 doesn't make any money yet) so if Airbus wants the best ROI they'd put it in to increasing A320 production, IMHO.
Clearly everyone involved is making the right noises and money is going in to support the A220 ramp up, but based on the info above it'll take another six years or so to get to the point where one A220 rolls out of the factory for every six A320s.