It is possible that Airbus now expects all coming deals to be profitable.
Airbus Canada has to finance itself starting in February 2020. It was said many times that Airbus Canada is still losing money until 2026 or so. This was said by one Airbus exec.
Obviously it is not reasonable to continue delivering aircraft at loss.
There was a question asked in one comment above as whether the fact Airbus may require coming deals to be profitable constitutes a hurdle for selling more A220.
I agree, but they had also 1 billion dollar reserve to burn through. I thought the expected profitability was after or just before the 1 billion dollar was finished...
Airbus put a supply chain manager in charge of the A220 for a reason:viewtopic.php?f=3&t=1460695
I believe future sales will be at a future profit. That said, there are enough options to be exercised that volume will go up helping that profit goal. e.g., I posted upthread Spirit needs a volume of 100+ to be profitable. Airbus cannot negotiate that contract until they provide the volume.
We've seen Airbus make deals, so I am not understanding this sunk cost obsession. That is the past.
We already have links in the thread about Airbus going to rate 6 per month with plans mid decade to rate 14.
We have a debate on will that happen. I believe so. It is my opinion that the pandemic gave Pratt and Airbus (I was deliberate in the order) to debug the A220 enough for more sales The issue today, in my opinion (see lease/values thread for examples, I posted links in this thread before) will compete. e.g., between the A220 and more cheap used 739, DL might go for 739s. But I do not think all there options will go unused.
We are at a tough sales time. It will be tough until the used narrowbody market is put back into service. I speculate that will take 3 more years. So between now and then, Airbus will persue more otders. ALV has been incredibly successful placing aircraft. It is just a matter of terms. If Airbus won't budge, then they miss out on short term opportunities and wait for options. If Airbus does negotiate, then ALC places A220s at small airlines and if we look at past history, there is a chance one of those "seed airlines" will mature into a mud-size order.
Airbus will persue orders, the debate is what profit margin and thus what pricing. I will ignore small airlines as the A220 leasing market seems to be surprisingly healthy at this time judging by the placements. I expect leasing companies to exercise options in coming years to continue to expand the A220 operators.
We already know SAS, Truejet, and Green Africa are negotiating mid size orders. Yet most mid-size A220 orders have been a surprise (AirBaltic, Breeze, AirFrance). I expect AC to exercise options once out of their current financial situation as well as JetBlue, AirFrance, AirBaltic, Delta, and the leasing companies. I look forward to a pleasant surprise mid-size order (50+ A220) in the next 18 months.