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Phosphorus
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 10:35 am

Jomar777 wrote:
...
IQ's share was always intended to be what it is - a silent partner only turning up for the dividends towards recoup and profit on what it had invested before. However, in the extremely hypotetical event that BBD went under that their shares ended up in the market, who could guarantee that a new investor would not come onboard for it with enough cash to also tempt IQ's to divest themselves too? Dos not need to be another aircraft industry - can be anyone...

BBD shareholding in CSALP is encumbered with call option, held by Airbus, to buy it.
I don't have access to exact wording of their agreement, but we do know that it has a "normal" exercise date, and apparently has provisions for accelerating it. If Airbus's lawyers are not asleep (hardly), insolvency or risk of insolvency of BBD (who is under obligation to invest a lot of money into CSALP) might be construed as a trigger to such acceleration.

Even if BBD manages to march into bankruptcy court, before Airbus notices, Airbus has a claim on CSALP shares, and voiding options would be a difficult legal battle for BBD estate.
The option of third party, owning BBD's share in CSALP, is basically down to Airbus letting it happen, or being hapless (too hapless to be true) to prevent it.
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 10:52 am

JoergAtADN wrote:
keesje wrote:
I can see the A319NEO program beeing skipped for efficiency reasons.

A319 customers being offered A320s/A223s and ACJ319 customers moved to ACJ320s.


I think this is very unlikely in the foreseeable, because:
-The A319NEO can be build on the same final assembly lines as the A320NEO/A321NEO - maybe future FALs will be simplified, but the existing FALs have more the enough capacity for the A319NEO demand
-Airbus makes profit with every A32XNEO plane, but a loss with every A220 plane they build
-Airbus said, that they could sell more A220 than they can build - converting existing A319NEO orders to the A220, would therefore mean less sales overall


I think this is a similar situation as we saw with the A350-800 (which had more customers than the A319..) A leaner more affordable alternative became available within the portfolio (A330NEO) and airlines were offered to upgrade to the bigger variant (A350-900).

Image

Airbus rather sells an A320 series FAL slot as a A320 or A321XLR. The A319NEO/ACJ is off-standard, costly to integrate.

On the A220, delivery rate is the main challenge. Target is 15-20 / month mid decade. Which is still lowish..
It seems a good moment for A to rationalize. Order books are filled & competition is stumbling. Full program ownership can improve decisiveness.

.. meanwhile in the background there's a US LCC with an aging 500(!) 737-700 fleet coming to conclusions. And there's another aging Airbus NB fleet too in Chicago, The scale of those opportunities might drive Airbus to pump additional billions accross the Ocean short term, to ramp up A220 production ...
Last edited by keesje on Wed Feb 12, 2020 11:00 am, edited 3 times in total.
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Amiga500
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 10:55 am

Jomar777 wrote:
To stretch the A220 to a 500 is to simply create a direct competitor to the A320. By buying the C-Series program as it stands, Airbus effectivelly canned the A319 - fair point. But to risk their A320 is a bit too far. Even more when you consider that Airbus seems not to be able to deliver their orders (A320 and A220) fast enough.


I get tired repeating this, but will do so again.

If (worst case scenario for Airbus) an airline buys an A220-500 instead of an A320, that is a production slot freed for A321.

So logically:
if profitA225 > profitA320:
No brainer for Airbus to launch program
elif (profitA225 + profitA321) > profitA320:
Sensible for Airbus to launch program

In the alternative scenario for Airbus the A225 is bringing in a new customer from the 737MAX, in which case its profit it wouldn't have seen anyway.


It is not a zero sum game where A225 sale instead of A320 = bad.
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 11:00 am

keesje wrote:
I can see the A319NEO program beeing skipped for efficiency reasons.
A319 customers being offered A320s/A223s and ACJ319 customers moved to ACJ320s.
That will cost Airbus money, customers won't be willing to pay extra. But save costs longer term.


Ahh, doubt that.

At least one ACJ319neo has already been delivered.
 
JonesNL
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 11:04 am

keesje wrote:
JoergAtADN wrote:
keesje wrote:
I can see the A319NEO program beeing skipped for efficiency reasons.

A319 customers being offered A320s/A223s and ACJ319 customers moved to ACJ320s.


I think this is very unlikely in the foreseeable, because:
-The A319NEO can be build on the same final assembly lines as the A320NEO/A321NEO - maybe future FALs will be simplified, but the existing FALs have more the enough capacity for the A319NEO demand
-Airbus makes profit with every A32XNEO plane, but a loss with every A220 plane they build
-Airbus said, that they could sell more A220 than they can build - converting existing A319NEO orders to the A220, would therefore mean less sales overall


I think this is a similar situation as we saw with the A350-800 (which had more customers than the A319..) A leaner more affordable alternative became available within the portfolio (A330NEO) and airlines were offered to upgrade to the bigger variant (A350-900).

Image

Airbus rather sells an A320 series FAL slot as a A320 or A321XLR. The A319NEO/ACJ is off-standard, costly to produce.

On the A220, delivery rate is the main challenge. Target is 15-20 / month mid decade. Which is still lowish..

It seems a good moment for A to rationalize. Order books are filled & competition is stumbling. Full program ownership can improve decisiveness.

.. meanwhile in the background there's a US LCC with an aging 500(!) 737-700 fleet coming to conclusions. And there's another aging Airbus NB fleet too in Chicago, The scale of those opportunities might drive Airbus to pump additional billions accross the Ocean short term, to ramp up A220 production ...


I am guessing you mean United's fleet. They have a ton of Max on order. If they do not cancel them, getting an huge A22x order would be big suprise. Also, they are around the corner from Boeing.
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 12:02 pm

Amiga500 wrote:
Jomar777 wrote:
To stretch the A220 to a 500 is to simply create a direct competitor to the A320. By buying the C-Series program as it stands, Airbus effectivelly canned the A319 - fair point. But to risk their A320 is a bit too far. Even more when you consider that Airbus seems not to be able to deliver their orders (A320 and A220) fast enough.


I get tired repeating this, but will do so again.

If (worst case scenario for Airbus) an airline buys an A220-500 instead of an A320, that is a production slot freed for A321.

So logically:
if profitA225 > profitA320:
No brainer for Airbus to launch program
elif (profitA225 + profitA321) > profitA320:
Sensible for Airbus to launch program

In the alternative scenario for Airbus the A225 is bringing in a new customer from the 737MAX, in which case its profit it wouldn't have seen anyway.


It is not a zero sum game where A225 sale instead of A320 = bad.


Utterly, completely, totally correct. I agree.

And you didn't even mention the engine.....how the big GTF engine is optimal for the 6 abreast A320 and changed its mission profile, while the small GTF is optimal for the 5 abreast A220 and works so well for 110-150 seats. For 150 seat missions under 1,500nm, the A220-500 is the best solution in the marketplace. This has been a historical sweet spot.

Many people, when discussing the economy, don't understand that it is not a zero sum game.
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 12:52 pm

WIederling wrote:

What would Boeing have done with the same opportunity?
( did B have a comparable $1 offer? )
My expectation would have been to crash the programm fully.
Keep away competition to the 737. C-Series was a danger
to Airbus only anyway.


The chances, that Boeing would have had crashed the program would have been for sure higher. As I pointed out earlier, the CS is a higher threat to the 737 than to the 320s.

As far as I know the 320s have an advantage over Boeing for longer missions, as the frame is heaver than the 737 frames and have an larger diameter. So Airbus was always under pressure from "below" > thus the not so good A319 sale numbers. The 737 is more under pressure from "above" > see A321.

So for Airbus it is an advantage keeping the CSeries alive, as they have now a competitive product against the 737.
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 12:54 pm

JonesNL wrote:
keesje wrote:

.. meanwhile in the background there's a US LCC with an aging 500(!) 737-700 fleet coming to conclusions. And there's another aging Airbus NB fleet too in Chicago, The scale of those opportunities might drive Airbus to pump additional billions accross the Ocean short term, to ramp up A220 production ...


I am guessing you mean United's fleet. They have a ton of Max on order. If they do not cancel them, getting an huge A22x order would be big suprise. Also, they are around the corner from Boeing.


United has a large, aging A319, A320, 737-700 fleet to replace. https://www.airfleets.net/ageflotte/Uni ... rlines.htm
I expect United to hold on to their core 737-800/900ER fleet for as long as possible, at this stage.

Image

But regardless of what they publicly say, in the end they have to fill their network <150 seats.

United buying a A321neo fleet was not on the agenda, until they did it. When NMA didn't move on as expected.
A major reason to not buy 200 A220-300's for United at this stage is probably they can't get them soon.

The 737MAX being the 737MAX, it changed the NB business environment.
While they love Boeing, United can't hold their breath forever.

Jetblue deliveries start this year and Delta takes them weekly. Maybe AA will sit on their hands, maybe not.
Last edited by keesje on Wed Feb 12, 2020 1:09 pm, edited 1 time in total.
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 12:56 pm

JoergAtADN wrote:
keesje wrote:
I can see the A319NEO program beeing skipped for efficiency reasons.

A319 customers being offered A320s/A223s and ACJ319 customers moved to ACJ320s.


I think this is very unlikely in the foreseeable, because:
-The A319NEO can be build on the same final assembly lines as the A320NEO/A321NEO - maybe future FALs will be simplified, but the existing FALs have more the enough capacity for the A319NEO demand
-Airbus makes profit with every A32XNEO plane, but a loss with every A220 plane they build
-Airbus said, that they could sell more A220 than they can build - converting existing A319NEO orders to the A220, would therefore mean less sales overall


I think as well, that Airbus will keep the A319 line and in mid-term will work on the A220-500.

Why? Because I think there is so much demand in this marked, that parallel products and manufacturing lines would not hurt. Airbus might be even more flexible in offering the ideal product and good production slots.
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 1:26 pm

eisenbach wrote:
JoergAtADN wrote:
keesje wrote:
I can see the A319NEO program beeing skipped for efficiency reasons.

A319 customers being offered A320s/A223s and ACJ319 customers moved to ACJ320s.


I think this is very unlikely in the foreseeable, because:
-The A319NEO can be build on the same final assembly lines as the A320NEO/A321NEO - maybe future FALs will be simplified, but the existing FALs have more the enough capacity for the A319NEO demand
-Airbus makes profit with every A32XNEO plane, but a loss with every A220 plane they build
-Airbus said, that they could sell more A220 than they can build - converting existing A319NEO orders to the A220, would therefore mean less sales overall


I think as well, that Airbus will keep the A319 line and in mid-term will work on the A220-500.

Why? Because I think there is so much demand in this marked, that parallel products and manufacturing lines would not hurt. Airbus might be even more flexible in offering the ideal product and good production slots.


After 9 years of sales, the A319NEO at this stage has 1.3% of the NEO orders. Spirit & "undisclosed", both likely with conversion rights.
Airlines don't love orphan fleets. For Airbus A319NEO didn't prove a market opportunity, more an expensive production disruption..
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 1:32 pm

Is it worthwhile reworking an A320XLR for a few corporate orders?

Otherwise the ACJ320 will have a significant range shortfall compared to the ACJ319. It makes conversions difficult.
 
JonesNL
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 2:15 pm

keesje wrote:
JonesNL wrote:
keesje wrote:

.. meanwhile in the background there's a US LCC with an aging 500(!) 737-700 fleet coming to conclusions. And there's another aging Airbus NB fleet too in Chicago, The scale of those opportunities might drive Airbus to pump additional billions accross the Ocean short term, to ramp up A220 production ...


I am guessing you mean United's fleet. They have a ton of Max on order. If they do not cancel them, getting an huge A22x order would be big suprise. Also, they are around the corner from Boeing.


United has a large, aging A319, A320, 737-700 fleet to replace. https://www.airfleets.net/ageflotte/Uni ... rlines.htm
I expect United to hold on to their core 737-800/900ER fleet for as long as possible, at this stage.

Image

But regardless of what they publicly say, in the end they have to fill their network <150 seats.

United buying a A321neo fleet was not on the agenda, until they did it. When NMA didn't move on as expected.
A major reason to not buy 200 A220-300's for United at this stage is probably they can't get them soon.

The 737MAX being the 737MAX, it changed the NB business environment.
While they love Boeing, United can't hold their breath forever.

Jetblue deliveries start this year and Delta takes them weekly. Maybe AA will sit on their hands, maybe not.


I dug into it a bit more, because I was a bit in disbelieve. The orders that United currently has are only 737Max9 and Max10 and nothing smaller. The current fleet with orders looks as follows:

Type Current Orders Total Total segment
Airbus A319-100 82 24 106
Airbus A320-200 99 2 101
Boeing 737-700 41 20 61
Boeing 737-800 141 0 141 409

Boeing 737-900 12 0 12
Boeing 737-900ER 136 0 136 148

Boeing 737 MAX 9 14 71 85
Boeing 737 MAX10 0 100 100 185

The Max orders will replace all 737-900 and variants and maybe around 40 737-800. Which leaves 370 planes that need to be replaced in the 126 - 166 pax segment. I think your estimate of an order of 200 is not to far fetched. Although they could aim for commonality and go for the A32x neo or the MAX variants. But where the chances would normally be 50-50 they are now 66-33 in favor of Airbus vs Boeing as they have 2 options for Airlines.
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 2:50 pm

keesje wrote:
I can see the A319NEO program beeing skipped for efficiency reasons.


Too late for that and especially after Spirit just placed a not-insignificant order for the model.
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 3:26 pm

scbriml wrote:
keesje wrote:
I can see the A319NEO program beeing skipped for efficiency reasons.


Too late for that and especially after Spirit just placed a not-insignificant order for the model.


I believe it, when I see them roll-out of the FAL :wink2:

Spirt has many A320/321 in the fleet and on order & would be "special" not to have conversion rights baked in & don't like an orphan fleet.

When the moment of truth comes, they are probably happy to help out Airbus converting their slots to A320s, for a $uitable compensation.

Same for the other customers. The longer they wait, the more expensive it gets though....

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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 3:43 pm

frmrCapCadet wrote:
The 220 is a good plane, we all know that. Whether or not it will be a great seller is still, excuse the phrase, up in the air.


They should do whatever it takes to get Southwest to make an order for 500x -300s assembled in Alabama. Southwest seems comfortable with the smaller seat counts compared to other LCC.
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 4:09 pm

keesje wrote:
Spirt has many A320/321 in the fleet and on order & would be "special" not to have conversion rights baked in & don't like an orphan fleet.


Regardless, NK could have ordered A220s or A320s, but instead went for nearly 50 A319s. It’s astonishing how many posters here think they know better than the airlines spending billions on new planes, what suits those airlines better.

NK’s A319s would represent nearly 1/3 of their current neo orders, so trying to dismiss it as an ‘orphan’ is laughable.
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 4:22 pm

scbriml wrote:
keesje wrote:
Spirt has many A320/321 in the fleet and on order & would be "special" not to have conversion rights baked in & don't like an orphan fleet.


Regardless, NK could have ordered A220s or A320s, but instead went for nearly 50 A319s. It’s astonishing how many posters here think they know better than the airlines spending billions on new planes, what suits those airlines better.

NK’s A319s would represent nearly 1/3 of their current neo orders, so trying to dismiss it as an ‘orphan’ is laughable.


Let's stick to the facts, 1.3% of NEO's sold over the last 9 years are A319NEO's.
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Amiga500
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 5:07 pm

Nick614 wrote:
frmrCapCadet wrote:
The 220 is a good plane, we all know that. Whether or not it will be a great seller is still, excuse the phrase, up in the air.


They should do whatever it takes to get Southwest to make an order for 500x -300s assembled in Alabama. Southwest seems comfortable with the smaller seat counts compared to other LCC.


Why cut Southwest a deal? That might be the sale that recoups it all for Airbus.


If the A223 keeps delivering and P&W get a PIP or two on it, when Moxy and Delta get them established, it just needs someone to look at expanding into Southest's market for them to have to react in some shape or form.

At which point Airbus are sitting very pretty as there is nothing directly suitable.

The 737-7 isn't good enough on a recurring costs basis. The 737-8 is too big, either load factors would plummet or yield would plummet. There are no easy (non A220) solutions for Southwest.

All predicated on **if** someone starts to encroach on their market.
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 5:09 pm

keesje wrote:
scbriml wrote:
keesje wrote:
Spirt has many A320/321 in the fleet and on order & would be "special" not to have conversion rights baked in & don't like an orphan fleet.

Regardless, NK could have ordered A220s or A320s, but instead went for nearly 50 A319s. It’s astonishing how many posters here think they know better than the airlines spending billions on new planes, what suits those airlines better.

NK’s A319s would represent nearly 1/3 of their current neo orders, so trying to dismiss it as an ‘orphan’ is laughable.

Let's stick to the facts, 1.3% of NEO's sold over the last 9 years are A319NEO's.
Even the airlines think they know better than the airlines spending billions on new planes.

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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 5:14 pm

eisenbach wrote:
As far as I know the 320s have an advantage over Boeing for longer missions, as the frame is heaver than the 737 frames and have an larger diameter. So Airbus was always under pressure from "below" > thus the not so good A319 sale numbers. .


The A320 isn't really all that much heavier. The upcoming 10MAX will have similar OEW to the A321NEO.
It needs more thrust to provide for the 1 engine out higher obstacle clearance requirements ( later cert ).

Where are the large MAX-7 sales to give some truth to your argument?

( currently 82 MAX7 vs 84 for the A319 and 3200 MAX8 vs 3900 A320 WP numbers, future swaps? no idea)
Last edited by WIederling on Wed Feb 12, 2020 5:21 pm, edited 1 time in total.
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Wed Feb 12, 2020 5:16 pm

scbriml wrote:
keesje wrote:
Spirt has many A320/321 in the fleet and on order & would be "special" not to have conversion rights baked in & don't like an orphan fleet.


Regardless, NK could have ordered A220s or A320s, but instead went for nearly 50 A319s. It’s astonishing how many posters here think they know better than the airlines spending billions on new planes, what suits those airlines better.

NK’s A319s would represent nearly 1/3 of their current neo orders, so trying to dismiss it as an ‘orphan’ is laughable.

That will go down as a huge mistake for nk if what has been reported about a220 costs are true.
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 3:03 am

NK must be finding some value in aircraft commonality. It works for Southwest, Ryanair and EasyJet, too.

reminder: BBD earnings due out tomorrow morning, 13 Feb. We might expect a write down of BBD's A220 program ownership or announcement of sale.
 
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 5:09 am

Official:

Airbus earnings announcement - deal has been reached and Airbus and Quebec to be the sole owner of A220 program.

Image

https://pbs.twimg.com/media/EQoZExIUEAAFn4w?format=jpg&

$BBD.B.CA Completes its strategic exit from Commercial Aviation: Airbus and the Government of Québec become sole owners of the A220 Programme for $591M ($531M was received at closing and $60M to be paid over the 2020-21 period.

http://crweworld.com/article/news-provi ... l-aviation
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Re: Official: Bombardier sells remaining stake in A220 program

Thu Feb 13, 2020 5:17 am

Nicely played by Quebec, who managed to increase their share at no cost (not sure how... Did they take on some of the debt?) and secured local jobs. This was their main goal all along.

Congrats to Airbus. $591 million for an aircraft that cost $7b to develop is a good deal, I would say... It will of course cost them a lot more in additional investment, but still.
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 5:17 am

 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 5:55 am

And now maybe 100 orders for the -300 by Green Africa. The A320 family is sold out for years, and the MAX is a mess, so Green Africa is considering cancelling its orders for the MAX and ordering 100 of the A220-300 (and maybe the -500 if Airbus brings it online). Otherwise, it won't be able to get off the ground anytime soon. It has big backers, including Tom Horton (ex of AA).

So this little acquisition accordingly gives Airbus a way to exploit the MAX problem by providing a line of aircraft they can still sell in the near term.

And having flown on it, I have to say it's a nice ride.
 
JonesNL
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 6:45 am

How did the government of Quebec got a higher stake without paying anything?

Not a bad deal anyway. Getting 75% of something that cost 10 times the purchase price of 600miljoen.
Last edited by JonesNL on Thu Feb 13, 2020 6:53 am, edited 1 time in total.
 
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 6:46 am

Congrats to Airbus and Quebec! Excellent deal!

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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 6:51 am

Now that this "hurdle" is out of the way for Airbus, will we see the expected intensification of investment in the A220 program?

viewtopic.php?f=3&t=1400805
Innovation is seeing opportunity before obstacle.
 
VSMUT
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 7:07 am

eisenbach wrote:
WIederling wrote:

What would Boeing have done with the same opportunity?
( did B have a comparable $1 offer? )
My expectation would have been to crash the programm fully.
Keep away competition to the 737. C-Series was a danger
to Airbus only anyway.


As far as I know the 320s have an advantage over Boeing for longer missions, as the frame is heaver than the 737 frames and have an larger diameter. So Airbus was always under pressure from "below" > thus the not so good A319 sale numbers. The 737 is more under pressure from "above" > see A321.

So for Airbus it is an advantage keeping the CSeries alive, as they have now a competitive product against the 737.


Could we cut this myth already please? The 737MAX has sub-optimal cut-down engines, something that weighs way higher than a slightly larger fuselage. Even dedicated short-haul regional jets like the A220 and E2-190/195 feature bigger fan diameters.
The 737MAX is the inferior one.
 
Kikko19
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 8:12 am

Taxi645 wrote:
Now that this "hurdle" is out of the way for Airbus, will we see the expected intensification of investment in the A220 program?

viewtopic.php?f=3&t=1400805


I'd expect as well an announcement by Airbus to open new FAL or increase production in both sites very soon.
 
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eisenbach
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 8:27 am

MIflyer12 wrote:
NK must be finding some value in aircraft commonality. It works for Southwest, Ryanair and EasyJet, too.




Aircraft commonality is really underrated. I have some insight into airline fleet management and it makes a huge difference, managing multiple aircrews with different type ratings or a homogenous group. It's much, much easier to adapt short changes in the flight plan (e.g. due to IRREG or ill crew) if you have one crew pool. If you have for example three aircraft types, you can be sure, that you have always the wrong personell in reserve or one have to keep so much standby pilots/cabin crew, that the costs are too high.
DC-6, DC9, Do228, Saab340, Twin-Otter, C212, Fokker50, AN24, MD90, MD83, EMB120, A380, A300, A343, A346, B721, B742, B744, B748...
 
WIederling
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 8:34 am

LAXintl wrote:
Official:

Airbus earnings announcement - deal has been reached and Airbus and Quebec to be the sole owner of A220 program.

https://pbs.twimg.com/media/EQoZExIUEAA ... name=small

https://pbs.twimg.com/media/EQoZExIUEAAFn4w?format=jpg&

$BBD.B.CA Completes its strategic exit from Commercial Aviation: Airbus and the Government of Québec become sole owners of the A220 Programme for $591M ($531M was received at closing and $60M to be paid over the 2020-21 period.

http://crweworld.com/article/news-provi ... l-aviation

could Québec morph its ownership into Airbus shares ( while Airbus ingests the remaining project half?
Murphy is an optimist
 
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Taxi645
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 9:08 am

Kikko19 wrote:
Taxi645 wrote:
Now that this "hurdle" is out of the way for Airbus, will we see the expected intensification of investment in the A220 program?

viewtopic.php?f=3&t=1400805


I'd expect as well an announcement by Airbus to open new FAL or increase production in both sites very soon.


Now that Boeing has put NMA on ice, the likelyhood of much more competition for the A220 has suddenly become much larger. Better to get into a good starting position against that competition now that you have the chance to gain a stronger lead.
Innovation is seeing opportunity before obstacle.
 
NonTechAvLover
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 9:12 am

WIederling wrote:
LAXintl wrote:
Official:

Airbus earnings announcement - deal has been reached and Airbus and Quebec to be the sole owner of A220 program.

https://pbs.twimg.com/media/EQoZExIUEAA ... name=small

https://pbs.twimg.com/media/EQoZExIUEAAFn4w?format=jpg&

$BBD.B.CA Completes its strategic exit from Commercial Aviation: Airbus and the Government of Québec become sole owners of the A220 Programme for $591M ($531M was received at closing and $60M to be paid over the 2020-21 period.

http://crweworld.com/article/news-provi ... l-aviation

could Québec morph its ownership into Airbus shares ( while Airbus ingests the remaining project half?


I see your Brexit and raise it by one Quebec, the E.U. said...
 
NonTechAvLover
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 9:27 am

One question: it appears that before Bombardier C series became a casualty of whatever, it appears Airbus did not have a satisfactory offering in the 220-100 and -300 segment. If Bombardier had managed to survive independently and Airbus did not have the option of becoming the owner of the 220 line, what would it have done and what would it have had to do to compete and even succeed in this segment? The question is asked with the assumption that it’s own offerings (318 and 319) in this segment were not terribly successful, a statement most people would agree on, it seems.

The answer to this question is relevant to the ultimate evaluation of AB’s 220 move, I think. You can only judge that move by comparing it to what it’s likely alternatives would have been, not by trying to evaluate the move alone. I realize those likely alternatives are counterfactual and not capable of determination with any certainty, but I also think there is enough industry knowledge on this board to make educated guesses.

If the question of what AB would have done without the 220 series has already been discussed elsewhere, apologies for the repeat question and I would appreciate a link to a topic and pages about the discussion.

Regards,
 
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scbriml
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 9:33 am

keesje wrote:
Let's stick to the facts


Agreed - the fact is NK just ordered 47 A319neos.

Revelation wrote:
I miss the days when people argued for the sanctity of VS's A380 contracts


:D At least that was years after the order was placed, not days.

MIflyer12 wrote:
NK must be finding some value in aircraft commonality. It works for Southwest, Ryanair and EasyJet, too.


Exactly - WN are geniuses while NK are stupid for doing exactly the same thing. :confused:


Meanwhile, congrats to Airbus on picking up 75% of the program for peanuts.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
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VirginFlyer
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 9:43 am

WIederling wrote:
LAXintl wrote:
Official:

Airbus earnings announcement - deal has been reached and Airbus and Quebec to be the sole owner of A220 program.

https://pbs.twimg.com/media/EQoZExIUEAA ... name=small

https://pbs.twimg.com/media/EQoZExIUEAAFn4w?format=jpg&

$BBD.B.CA Completes its strategic exit from Commercial Aviation: Airbus and the Government of Québec become sole owners of the A220 Programme for $591M ($531M was received at closing and $60M to be paid over the 2020-21 period.

http://crweworld.com/article/news-provi ... l-aviation

could Québec morph its ownership into Airbus shares ( while Airbus ingests the remaining project half?

An intriguing idea if it does and results in Quebec picking up an increased part of the Airbus global supply chain. It would work out to be incredibly well played by the Quebec government, if perhaps a little Steven Bradbury-esque.

V/F
It is not for him to pride himself who loveth his own country, but rather for him who loveth the whole world. The earth is but one country, and mankind its citizens. —Bahá'u'lláh
 
Jungleneer
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 10:38 am

We do not know the full picture yet. For example, what were the liabilities that came together with this purchase.
 
Olddog
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 10:50 am

It seems Quebec is mainly interested to keep an eye on the jobs, as I heard on a french TV that BBD is going to sell its railways division to Alsthom and that Quebec does not want cash for its shares but instead Asthom shares.
Signature censored
 
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PepeTheFrog
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 11:10 am

LAXintl wrote:
Official:

Airbus earnings announcement - deal has been reached and Airbus and Quebec to be the sole owner of A220 program.

Image

https://pbs.twimg.com/media/EQoZExIUEAAFn4w?format=jpg&

$BBD.B.CA Completes its strategic exit from Commercial Aviation: Airbus and the Government of Québec become sole owners of the A220 Programme for $591M ($531M was received at closing and $60M to be paid over the 2020-21 period.

http://crweworld.com/article/news-provi ... l-aviation


I fully expected this to happen.

So much cheaper than developing an entire new program.
Good moaning!
 
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seahawk
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 11:21 am

If Airbus would drop the A319, they can wait until the next up-grade. Then you can add a new wing and tail to really benefit from this.
 
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PepeTheFrog
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 11:29 am

Also part of the deal: Airbus will be able to buy the reaming 25% from Quebec in 2026:

https://www.flightglobal.com/programmes ... 22.article

The European airframer has confirmed that, under the revised ownership agreement for Airbus Canada Limited Partnership, the Investissement Quebec share will be redeemable to Airbus from 2026, three years later than the previous 2023 timeframe.


That's just a matter of time before Airbus gets the entire program.
Good moaning!
 
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DarkSnowyNight
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 11:29 am

scbriml wrote:
keesje wrote:
Let's stick to the facts


Agreed - the fact is NK just ordered 47 A319neos.


It is almost as though an Airline that has several operations to hot/high destinations in the northern and often mountainous reaches of Latin America might want a smaller version of an efficient platform that still carries a decent load and has better than excellent payload range for these missions... Or... Something...

scbriml wrote:

Exactly - WN are geniuses while NK are stupid for doing exactly the same thing. :confused:


Heh... WN & UA purchase used 73Gs & 319s from all sorts of mismatched sources... Brilliant!

NK order brand new, more efficient plane they likely got an excellent deal on... The Sky Is Falling!!!

scbriml wrote:
Meanwhile, congrats to Airbus on picking up 75% of the program for peanuts.


This cannot be said enough. This was a fantastic thing to have happen.

Airbus will get a new NB for around half a billion, and instantly develop new customers like David Neeleman's Breeze & expand existing relationships like with DL. There is literally no downside here.
"Nous ne sommes pas infectés. Il n'y a pas d'infection ici..."
 
MIflyer12
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 11:35 am

scbriml wrote:

Meanwhile, congrats to Airbus on picking up 75% of the program for peanuts.


BBD spent, what $6 Billion in development costs? It has now divested its ~32% stake in that, and its 32% share of all A220 profits going forward not just the current backlog of ~600, for USD 591 million and not having to fund further shortfalls. That is how poor they see prospects for even long-term profitability.
 
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scbriml
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 11:46 am

MIflyer12 wrote:
scbriml wrote:

Meanwhile, congrats to Airbus on picking up 75% of the program for peanuts.


BBD spent, what $6 Billion in development costs? It has now divested its ~32% stake in that, and its 32% share of all A220 profits going forward not just the current backlog of ~600, for USD 591 million and not having to fund further shortfalls. That is how poor they see prospects for even long-term profitability.


BBD is a huge mess.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
astuteman
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Re: UPDATED: Bombardier Sells Remaining Stake in A220 Program

Thu Feb 13, 2020 11:48 am

MIflyer12 wrote:
scbriml wrote:

Meanwhile, congrats to Airbus on picking up 75% of the program for peanuts.


BBD spent, what $6 Billion in development costs? It has now divested its ~32% stake in that, and its 32% share of all A220 profits going forward not just the current backlog of ~600, for USD 591 million and not having to fund further shortfalls. That is how poor they see prospects for even long-term profitability.


So the $590M paid to Bombardier, plus the $1Bn of further funding Bombardier now no longer have to provide values that 32% share at $1.59Bn which values the net present value (NPV) of the whole revenue stream at almost exactly $5Bn.
So that values the profit stream of the entire programme at $5Bn at 2020 dollars adjusted for inflation going forward.
I don't how familiar you are with NPV calculations, but on the basis that the first few years (which have the most leveraged impact on NPV) are likely to show a loss, this implies that the forward profit stream from that point onward is enormous.
And Airbus have secured 75% of that (or $3.75Bn at today's adjusted value) for just $590M

I don't know what bar you set for "poor prospects", but I suspect most investment specialists would look at the above and say "oh yes!"
Unless I have it wrong.. :)

Rgds
 
Jomar777
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 12:06 pm

Amiga500 wrote:
Jomar777 wrote:
To stretch the A220 to a 500 is to simply create a direct competitor to the A320. By buying the C-Series program as it stands, Airbus effectivelly canned the A319 - fair point. But to risk their A320 is a bit too far. Even more when you consider that Airbus seems not to be able to deliver their orders (A320 and A220) fast enough.


I get tired repeating this, but will do so again.

If (worst case scenario for Airbus) an airline buys an A220-500 instead of an A320, that is a production slot freed for A321.

So logically:
if profitA225 > profitA320:
No brainer for Airbus to launch program
elif (profitA225 + profitA321) > profitA320:
Sensible for Airbus to launch program

In the alternative scenario for Airbus the A225 is bringing in a new customer from the 737MAX, in which case its profit it wouldn't have seen anyway.


It is not a zero sum game where A225 sale instead of A320 = bad.


I will not even try to argue since I respect your opinion... but I do not agree.

Once Airbus finally brings their production up to date towards cater for what ks already sold, may we see clearly the merits (or not...) but as much as you try to convince, I still feel that there's no case for a A220-500 nowadays whatsoever. Airbus has not announced anything on this area yet so I feel justified.
 
Jomar777
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 12:10 pm

SteelChair wrote:
Amiga500 wrote:
Jomar777 wrote:
To stretch the A220 to a 500 is to simply create a direct competitor to the A320. By buying the C-Series program as it stands, Airbus effectivelly canned the A319 - fair point. But to risk their A320 is a bit too far. Even more when you consider that Airbus seems not to be able to deliver their orders (A320 and A220) fast enough.


I get tired repeating this, but will do so again.

If (worst case scenario for Airbus) an airline buys an A220-500 instead of an A320, that is a production slot freed for A321.

So logically:
if profitA225 > profitA320:
No brainer for Airbus to launch program
elif (profitA225 + profitA321) > profitA320:
Sensible for Airbus to launch program

In the alternative scenario for Airbus the A225 is bringing in a new customer from the 737MAX, in which case its profit it wouldn't have seen anyway.


It is not a zero sum game where A225 sale instead of A320 = bad.


Utterly, completely, totally correct. I agree.

And you didn't even mention the engine.....how the big GTF engine is optimal for the 6 abreast A320 and changed its mission profile, while the small GTF is optimal for the 5 abreast A220 and works so well for 110-150 seats. For 150 seat missions under 1,500nm, the A220-500 is the best solution in the marketplace. This has been a historical sweet spot.

Many people, when discussing the economy, don't understand that it is not a zero sum game.


So why oh why we only hear about the A220-500 on A.net? Why has Airbus already not jumped on the bandwagon and started offering the extension?
 
Jomar777
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Re: WSJ: Airbus in Advanced Talks to Acquire Bombardier Stake in A220 Program

Thu Feb 13, 2020 12:16 pm

JoergAtADN wrote:
keesje wrote:
I can see the A319NEO program beeing skipped for efficiency reasons.

A319 customers being offered A320s/A223s and ACJ319 customers moved to ACJ320s.


I think this is very unlikely in the foreseeable, because:
-The A319NEO can be build on the same final assembly lines as the A320NEO/A321NEO - maybe future FALs will be simplified, but the existing FALs have more the enough capacity for the A319NEO demand
-Airbus makes profit with every A32XNEO plane, but a loss with every A220 plane they build
-Airbus said, that they could sell more A220 than they can build - converting existing A319NEO orders to the A220, would therefore mean less sales overall


Can you substantiate your statement that Airbus makes a loss on every A220 they are building? Not disputing but wondering why it would be so?

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