Airbus remains committed to A220 production schedule in Alabama

Airbus remains committed to A220 production schedule in Alabama
A worker inspects components on the body of an Airbus SE A220 plane on the assembly line at the Airbus Canada assembly and finishing site in Mirabel, Canada. (Bloomberg)

Airbus SE is sticking with production plans for its newest jet, the A220 narrow-body, in Alabama even as it has put the brakes on output in Canada as the coronavirus decreases demand across the European planemaker’s lineup of aircraft.

A plan to accelerate output toward 10 a month from the current four at the main A220 plant in Mirabel, Quebec, will be postponed until mid-2021, an Airbus spokeswoman said. A goal to build four a month by the middle of the decade in Mobile, where a new assembly line has just started, remains unchanged, she said.

The slowdown on the A220 program acquired from Bombardier Inc. will add to the cuts announced by Airbus earlier this month in response to a rapid reversal of fortune for its airline customers. The company said then it would slash output to about 48 planes a month across its A320, A330 and A350 programs. At the time, Chief Executive Officer Guillaume Faury said the company was still assessing demand for the smaller A220.

Bloomberg discusses what slowdown in airline industry could mean for airplane production from Alabama NewsCenter on Vimeo.

Airbus had to halt production of A220 jetliners in Canada near the end of March due to local government restrictions, and the shutdown has now been extended until May 5. When it returns, Airbus has told suppliers it is targeting a production rate of five per month on the program, according to a securities filing from Spirit Aerosystems Holdings Inc.

Back in February, when Airbus raised its stake in the program to 75%, the company said the A220 was seeing “very strong demand” and was positioning to help draw orders away from archrival Boeing Co.’s grounded 737 Max. Since then, the coronavirus has forced airline customers to delay or cancel orders across aircraft models to conserve cash.

Faury’s pledge to invest between $544 million and $1.1 billion in the A220 operation this year remains unchanged, the spokeswoman said. She said a plan to squeeze costs from the program remains a top priority.

Airbus had earlier targeted producing 14 A220 aircraft a month at the two sites by the middle of the decade. Now the Toulouse, France-based company is reconsidering its previous assumptions and may revisit the rate in the coming weeks and months, the spokeswoman said.

(With assistance from Siddharth Philip and Julie Johnsson. Contact the reporter at [email protected].)

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