Air France employees stand around the first Air France airliner's Airbus A220 during a ceremony in the Air France hangar at Paris Charles de Gaulle airport in Roissy, France, Sept. 29, 2021.GONZALO FUENTES/Reuters
Canadian taxpayers could be forgiven for holding their applause last week when Airbus SA and Air France broke out the champagne as the French carrier took possession of its first A220.
At a formal ceremony in a vast hangar at Paris’s Charles de Gaulle airport, Air France-KLM managing-director Benjamin Smith and French Transport Minister Jean-Baptiste Djebbari ran out of superlatives to describe the new 148-seat aircraft that France’s flag carrier will begin flying this month on medium-haul routes across Europe.
“This is not just another airplane. It’s an Airbus. And not just any Airbus. It’s a new series Airbus, an A220. And an A220 operated by Air France,” Mr. Djebbari explained. “In other words, the quintessence of French success and excellence.”
Canadians and Quebeckers may beg to differ.
After all, the A220 was developed in Canada by Montreal-based Bombardier Inc. , and backstopped by governments here to the tune of almost $2-billion. It landed in Airbus’s lap only after a desperate and debt-strapped Bombardier was forced to surrender control of the aircraft – then called the C Series – for a mere US$1.
If the A220 is the “quintessence” of anything, it is the failure of Canadian innovators to translate ground-breaking technology into commercial success. It is another example of intellectual property, developed by Canadians with Canadian tax dollars, fleeing the country.
The C Series fiasco, which led to the effective dismantling of Bombardier as the company sold off its rail and regional jet businesses to pay down debts related to the C Series, also raises questions about whether a Canadian-based innovator can go it alone in a global economy dominated by foreign-based oligopolies.
Bombardier tried. But its attempt to take on Airbus and Boeing was met with a ferocious response to prevent the Canadian upstart from upsetting their cozy duopoly. Airbus and U.S.-based Boeing slashed prices for their planes to undercut C Series sales. And when Bombardier did land a breakthrough order from Atlanta-based Delta Airlines, Boeing complained it had been “propelled by massive, supply creating and illegal government subsidies,” leading the U.S. Commerce Department to slap duties of 300 per cent on the C Series.
Such hardball tactics were nevertheless foreseeable when Conservative prime minister Stephen Harper’s government invested $350-million in the C Series in 2008. They became inevitable when Prime Minister Justin Trudeau’s Liberals stepped up in early 2017 with a $372-million loan for Bombardier’s C Series and Global 7000 business jet programs. That investment followed the Quebec government’s 2015 move to inject US$1-billion into the C Series program.
The direct government aid was on top of the lucrative research tax credits Bombardier was able to claim on the $6-billion it cost to develop the C Series.
Airbus A220 family at a glance
38.7 m
A220-300
Fuselage:
3.5 m
Wingspan: 35.1 m
Flight crew:
2
Performance
Engines:
2 Pratt &
Whitney
PW1500G
Range: 3,400 nautical miles (6,297 km)
Cabin crew:
3-5
Speed: Maximum cruise: 0.82 mach
Passengers:
120-150*
Max. operating altitude: 41,000 ft. (12,497 m)
35 m
A220-100
Wingspan: 35.1 m
Fuselage:
3.5 m
Flight crew:
2
Performance
Engines:
2 Pratt &
Whitney
PW1500G
Range: 3,450 nautical miles (6,390 km)
Cabin crew:
3-5
Speed: Maximum cruise: 0.82 mach
Passengers:
100-120*
Max. operating altitude: 41,000 ft. (12,497 m)
*Typical 2 class
JOHN SOPINSKI/THE GLOBE AND MAIl, SOURCE: airbus
Airbus A220 family at a glance
38.7 m
A220-300
Fuselage:
3.5 m
Wingspan: 35.1 m
Flight crew:
2
Performance
Engines:
2 Pratt &
Whitney
PW1500G
Range: 3,400 nautical miles (6,297 km)
Cabin crew:
3-5
Speed: Maximum cruise: 0.82 mach
Passengers:
120-150*
Max. operating altitude: 41,000 ft. (12,497 m)
35 m
A220-100
Wingspan: 35.1 m
Fuselage:
3.5 m
Flight crew:
2
Performance
Engines:
2 Pratt &
Whitney
PW1500G
Range: 3,450 nautical miles (6,390 km)
Cabin crew:
3-5
Speed: Maximum cruise: 0.82 mach
Passengers:
100-120*
Max. operating altitude: 41,000 ft. (12,497 m)
*Typical 2 class
JOHN SOPINSKI/THE GLOBE AND MAIl, SOURCE: airbus
Airbus A220 family at a glance
38.7 m
A220-300
Fuselage:
3.5 m
Wingspan: 35.1 m
Performance
Flight crew:
2
Range: 3,400 nautical miles (6,297 km)
Engines:
2 Pratt &
Whitney
PW1500G
Cabin crew:
3-5
Speed: Maximum cruise: 0.82 mach
Passengers:
120-150*
Max. operating altitude: 41,000 ft. (12,497 m)
35 m
A220-100
Wingspan: 35.1 m
Fuselage:
3.5 m
Flight crew:
2
Performance
Range: 3,450 nautical miles (6,390 km)
Cabin crew:
3-5
Engines:
2 Pratt &
Whitney
PW1500G
Speed: Maximum cruise: 0.82 mach
Passengers:
100-120*
Max. operating altitude: 41,000 ft. (12,497 m)
JOHN SOPINSKI/THE GLOBE AND MAIl, SOURCE: airbus
*Typical 2 class
Canadians and Quebeckers were led to believe the government aid would enable Bombardier to bring the C Series to market on its own. Instead, as former Bombardier chief executive officer Alain Bellemare later revealed, the 2015 investment by Quebec and 2017 federal loan amounted to “bridge financing” aimed at keeping the C Series program afloat until it could be sold to Airbus.
After ceding control for a symbolic US$1 in late 2017, Bombardier sold its remaining 31-per-cent stake in the C Series to Airbus in early 2020. The Quebec government, meanwhile, this year wrote off the remaining $289-million value of its 25-per-cent interest in the A220 program.
Even so, under Airbus, the A220 is being touted as a “game-changer” that will enable Air France to cut operating costs by 10 per cent, carbon emissions by 20 per cent and noise levels by 34 per cent compared to the aging A318s and A319s it replaces. Air France is pushing Airbus to launch a stretched version of the A220 to replace its 200-seat-range A320s.
While Airbus reaps the upside from A220 sales, Canada is left with the crumbs.
Airbus continues to assemble most A220s at the former Bombardier plant in Mirabel, Que., that it inherited when it acquired a controlling stake in the C Series program in late 2017. But as the French-based manufacturer ramps up production of the A220 to 14 planes a month, from the current five, it will rely more on its plant in Alabama. The future of the Mirabel plant looks safe for now, but it is by no means guaranteed.
After all, Airbus is slated to own 100 per cent of the A220 program by 2026, when it is set to buy the Quebec government’s stake “at fair market value.” That stake is currently worthless, since Airbus loses about US$400-million a year on the plane, according to analyst estimates cited by Leeham News.
To reach profitability, Airbus remains laser-focused on slashing A220 production costs. It aims to cut in half the time it takes to assemble each A220 by “stuffing” the Chinese-built fuselage, adding electrical wiring and other components, before the final assembly stage as it boosts output to 170 planes a year by 2025.
Airbus is also launching a business jet version of the A220 that will compete directly with Bombardier’s Global 6500 and 7500 executive aircraft, offering larger cabins and lower operating costs than the Montreal-based company’s planes. That could interfere with Bombardier’s hopes of thriving as a stand-alone business jet maker.
Will the flipside of French success be more Canadian failure?
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