Airbus likely to acquire Bombardier’s A220 stake

Airbus, which celebrated its 50th anniversary last year in Toulouse, said it was hoping to reduce the A220’s production costs further. (AFP)
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Updated 08 February 2020

Airbus likely to acquire Bombardier’s A220 stake

  • Airbus, with a 50.6 percent stake in the program, delivered 48 A220 jets in 2019

MONTREAL: Europe’s Airbus is likely to acquire Canadian plane and train maker Bombardier’s remaining stake in the A220 passenger jet program, two industry sources said.

A deal for Airbus to buy the 33.58 percent share in the program was widely expected after Bombardier said in January it was reviewing the stake in the joint venture. Barring surprises, a deal is expected next week ahead of both companies’ earnings reports on Feb. 13, the sources added.

Airbus and Bombardier both declined to comment. The terms of a potential deal that would mark Bombardier’s exit from commercial aviation were unclear.

Bombardier, which is weighing additional asset sales, faced a cash crunch in 2015 due to its high-stakes bet on the technologically advanced narrowbody.

Montreal-based Bombardier ceded control of the program to Airbus in 2018 for a token C$1 as part of broader efforts to improve its finances. It retained a minority stake alongside the Canadian province of Quebec.

Bombardier had warned the program would require additional cash to ramp up production, and could be subject to a writedown, as it faces higher-than-expected costs in its rail division and more than $9 billion of debt.

Since Airbus took over the program, the A220 has seen a sharp pickup in sales to 658 orders as of Jan. 31. But it has not seen the cost declines expected from Airbus applying its greater purchasing power with suppliers, one of the sources said.

A deal would leave Airbus to shoulder additional investments required by the plane program.

“Airbus did not particularly want to do this at this time, but is presented with little choice if Bombardier is pulling back,” the second source said.

Airbus, with a 50.6 percent stake in the program, delivered 48 A220 jets in 2019 and is ramping up production toward its maximum monthly capacity of 10 jets in Mirabel, Quebec, and four planes at a second line in Alabama by mid-decade.

Airbus Chief Commercial Officer Christian Scherer told Reuters in January the company was progressing toward its target of a double-digit percentage reduction in the A220’s production costs.

Quebec, with a 16.36 percent stake in the A220 program, would not invest further. 

Rather, it is trying to protect the program’s estimated 2,700 jobs, along with the province’s $1 billion investment in the program, Economy Minister Pierre Fitzgibbon said on Monday.

“We put $1 billion in it and that’s enough.”


Saudi PIF unit SEVEN to build theme parks and entertainment centers across the Kingdom

Updated 25 February 2020

Saudi PIF unit SEVEN to build theme parks and entertainment centers across the Kingdom

  • Plans include 20 entertainment destinations, 50 cinemas and two large theme parks in prime locations across the Kingdom
  • Each complex will feature several entertainment and leisure choices including cinemas, play areas, rides and F&B outlets

LONDON: The Saudi Entertainment Ventures Company (SEVEN) plans to develop theme parks and entertainment centers around the country.
Plans include 20 entertainment destinations, 50 cinemas and two large theme parks in prime locations across the Kingdom, the Public Investment Fund unit said in a statement on Tuesday.
Each complex will feature several entertainment and leisure choices including cinemas, play areas, rides, F&B, attractions and more. 
“We are committed to realizing the goals of Saudi Vision 2030 to accelerate the creation of world-class entertainment assets in the Kingdom that support economic diversification, create new jobs, and contribute to socio-economic progress,” said SEVEN Chairman Abdullah Al-Dawood. “Our complexes will position the Kingdom as an entertainment, culture and tourism hub of the region.”
The new attractions are planned for cities that include Jeddah, Jazan, Taif, Tabuk and Yanbu as well as the Holy Cities of Makkah and Madinah.
In the capital the entertainment center at Al Hamra will serve the densely populated suburbs of north east Riyadh, with some 2.5 million people living within a 30 minute drive. In Dammam and Al Khobar, SEVEN is also developing new waterfront attractions.
Entertainment is expected to be a key driver for Saudi economic growth over the next four years according to a report released this week by CBRE, the international real estate broker.
In addition to the new entertainment centers announced by the PIF, a number of other high-profile projects are underway, including the Qiddiya Entertainment City, The Red Sea Project, AMAALA, Al Ula, King Salman Park and Riyadh Sport Boulevard.
The retail and hospitality sectors are expected to benefit from the entertainment boom with total retail space in the capital expected to reach 3.5 million square meters (sq m) of gross leasable area by 2024. By 2024, Jeddah’s retail market is expected to witness considerable supply growth, reaching over 2 million sq m. 
As of 2019, the Kingdom received about 59 million tourist trips and these figures are expected to continue to increase to 100 million tourist trips by 2024.
“It is clear that Saudi Arabia remains one of the game changers in the entertainment sectors globally,” said CBRE MENAT Managing Director Nicholas Maclean.