I do not know the contracts but if Airbus invests now in A220 lines, the A220 program does not make any profit if you just invest more than the profit would be without investing. And at one point the A220 will belong fully to Airbus, when the ramp up is finished and the cash flows in. So I think investing now is not the worst idea but I could be wrong because I dont know the small print in the contract with Bombardier.
The fine print is in https://www.airbus.com/newsroom/press-r ... ement.html
which is the initial announcement:
Airbus will benefit from call rights in respect of all of Bombardier’s interest in CSALP at fair market value, with the amount for non-voting participating shares used by Bombardier capped at the invested amount plus accrued but unpaid dividends, including a call right exercisable no earlier than 7.5 years following the closing, except in the event of certain changes in the control of Bombardier, in which case the right is accelerated. Bombardier will benefit from a corresponding put right whereby it could require that Airbus acquire its interest at fair market value after the expiry of the same period. IQ’s interest is redeemable at fair market value by CSALP, under certain conditions, starting in 2023. IQ will also benefit from tag along rights in connection with a sale by Bombardier of its interest in the partnership.
Closing was July 1, 2018 according to https://www.bombardier.com/en/media/new ... ercom.html
So the partnership can chose to buy out the IQ share starting in 2023, and/or in Feb 2026 either Airbus can request BBD sell its shares to Airbus or BBD can request Airbus buy its shares all at fair market values.
And of course all of this could be amended based on mutual consent, this is just the initial agreement.
Yet till it changes we have Airbus with 50.01% ownership and control of the board so it can decide pretty much anything it wants with regard to the future of the enterprise while IQ + BBD still own 49.99% so will receive dividends and benefit from any growth in the value of the enterprise recognized at time of sale.
It also contemplates that Bombardier will continue with its current funding plan of CSALP and will fund, if required, the cash shortfalls of CSALP during the first year following the closing up to a maximum amount of US$350 million, and during the second and third years following the closing up to a maximum aggregate amount of US$350 million over both years, in consideration for non-voting participating shares of CSALP with cumulative annual dividends of 2%, with any excess shortfall during such periods to be shared proportionately amongst Class A shareholders.
So, basically BBD is on the hook to support "its current funding plan" from July 2018 onward for three years.
I think it's pretty clear since the A220-500 was not offered for sale before the deal closed that "its current funding plan" did not include producing the A220-500.
Thus it's really up to Airbus to decide if/when/where/how to do A220-500 with QC+BBD along for the ride.
I don't see why Airbus could also not provide funds to ACLP to produce A225 and be paid in stock which would dilute the BBD+QC holding, or ask BBD+QC if they want to invest more in return for stock, etc.
Of course there is a political dimension and Airbus knows they are going to have a presence in Canada for many years to come so they must play nice or face the risk of blowback.