Reported by Chris Sloan in Mobile and James Field in London,
This week, as part of the Airbus in America tour, has seen top executives break ground on U.S. a based final assembly line for the Airbus A220, formerly known as the Bombardier CSeries.
The final assembly line (FAL) for the A320 program in Mobile opened up in September 2015, with the first delivery complete by April 2016.
Production at the A220 Final Assembly Line is scheduled to commence Q3 2019 in existing Airbus America facilities with first deliveries scheduled for 2020 meaning that the plant will be complete by the end of the first half of 2019.
Tom Enders, Airbus CEO; Guillaume Faury, the President of Airbus Commercial Aircraft; Jeff Knittel, CEO of Airbus Americas; and Philippe Balducchi, Head of Airbus Canada Partnership, were all present to give briefings.
Knittel began proceedings to the press, stating that Airbus has “changed the competitive dynamic in the U.S”.
They further highlighted that more than 1,500 Airbus aircraft are flying in the United States and around 2,400 across the Americas as a whole.
“We are a global aerospace company that invests in its communities. We’re not here just to sell products”, Knittel said, adding that Airbus has spent over $200 billion dollars in the U.S since 1990.
Nowadays, Airbus invests around $17 billion per year into the United States market, with 40% of Airbus content and parts produced there also. Airbus claims the A220’s U.S. made content at over 50 percent.
In the wake of government shutdowns and manufacturer competition, Knittel addressed the elephant in the room. “We’re not competing with the U.S. We’re competing in the U.S. We are a global aerospace company that invests in its communities. We’re not just here to sell products.”
He moved on swiftly to the relationship Airbus has had with the Latin American market (LATAM).
“We’ve been in LATAM for 30 years. Over the last two decades, air travel has doubled in LATAM. Less than half of top 20 cities are connected by one daily flight. The opportunity is huge with $350 billion of commercial aircraft needed. We have 71% of Latam backlog with 57% share of in-service fleet.”
For the U.S. & LATAM market
Knittel moved on to the achievements of the final assembly line in Mobile and where the manufacturer is with that factory currently as well as what is in store for the future.
“We delivered 50 aircraft in Mobile in 2018. 103 aircraft have been delivered since our first delivery in April 2016. By the end of 2019, we will be trending 5 aircraft per month with maximum potential of eight aircraft per month. This has created 700 jobs in Mobile. The A220 FAL will create an additional 400 jobs”.
Around $600 million was invested originally into the Airbus A320 Mobile Final Assembly Line. $300 million of extra investment will go into a new A220 Final Assembly Line.
Knittel believes that the “A220 line will reach four per month production rate at Mobile by the middle part of the next decade”. Mobile built A220s exclusively destined for U.S. airlines, which with 210 orders on the books, is the most major market for the program. Given the quick ramp up of the A320 program final assembly in Alabama and the backlog, one would have every reason to expect the predicted production rate to be reached in the early 2020s. Philippe Balducchi, head of the Airbus Canada partnership added “We have an urgency to begin production.”
The choice for extra American investment is partially due to lower labor costs, but that’s not the driving reason.
“The goal is to make all facilities more efficient. Labor cost alone is a Misnomer. It’s also about productivity that drives productivity.”
Knittel’s emphasis of the Airbus A220 is not surprising, especially for the Mobile County area.
The City and County Commissions have each approved a $8 million incentive package in economic development for the new final assembly line (FAL).
It is to be paid out at a rate of up to $800,000 per year over 10 years, to reimburse Airbus.
The State of Alabama hasn’t formally announced their financial commitment yet but its expected to be in the $7 to 8,000,000 range.
First deliveries of the A220 in the Mobile FAL is expected to be in 2020, with Delta becoming the first customer followed shortly thereafter by JetBlue and then the NewCo airline backed by David Neeleman temporarily dubbed Moxy.
Mobile County said that with this adding to the current A320 FAL in Brookley, it roughly represents an $800 million capital investment and around 1,000 jobs created.
Tom Enders, current Chairman and CEO of Airbus, doubled down on the relationship between Mobile and Airbus.
“I haven’t discovered a place more welcoming and friendly than Mobile. It was obvious when we made our deal with our Canadian friends that we build the A220 in America, our largest market”.
Delta and JetBlue executives on hand commented on the quality that the airplanes being delivered out of Mobile. Delta’s representative enthusiastically remarked that “The 20 of our A321s built in Mobile have been impeccable”
Retiring in April, Enders became a bit emotional at what will be his last groundbreaking event he will attend as CEO of the company. “Internationalization done the right way is about sharing. I am excited to be here for my last groundbreaking.”
On the Boeing and Embraer Joint Venture, he stated that the “move was bound to happen once we announced ours. But we by far have the best aircraft”.
The fate of the weakening market demand for the A319 and how it will be further effected by its only slightly smaller A220 sibling remains a hot topic. Guillaume Faury, the President of the Commercial wing and the incoming Airbus CEO believes that “there is still competition between the A319 and A220”, although “there will be fewer A319s moving forward”.
Faury further responded to questions of up-gaguing the current A220 program to a variant often referred to as the -500. And through leveraging the 220’s technology for an A320 successor down the line.
“As the A220 program evolves and becomes a commercial success you could expect Airbus to invest in it further as we have done with the A320 family.”
Airbus veteran Balducchi added “We begin the first production of A220 in Mobile this Summer with first delivery scheduled for mid-2020 and 4 aircraft per month rate achieved by the middle of the decade. We have an urgency to begin A220 production”.
The Groundbreaking Ceremony
The Groundbreaking Ceremony was attended by over 700 Airbus staff, dignitaries, and media. Enders received a standing ovation as he recounted the history of Airbus in Alabama that led to this moment. “We won the A330 MRTT (A tanker aircraft for the U.S. Air Force) and then we lost it (to Boeing). But after Airbus and Mobile invested so much together, we decided it was obvious to bring the A320 family FAL to Mobile. There were questions in the beginning, but there are no more.”
Kay Ivey, Governor of Alabama didn’t hide her enthusiasm for the European manufacturer’s presence in Alabama with what sounded almost like a stump speech. “I couldn’t be more thrilled that Airbus is bringing 400 new high paid and high skilled jobs to Alabama which will each support five more jobs.”
Sandy Stimpson, Mayor of Mobile, noted that “The A220 line is poised to do something no one thought could happen. We will be looked upon as forth largest commercial airliner production site in the under a decade.”
Even with all the dignitaries in attendance, there were two obvious absences felt: An A220 and the “Father of the CSeries / A220” Rob Dewar.
The event concluded with a stirring groundbreaking ceremony backed by a volley of fireworks – a metaphor for the competition Airbus is bringing to the market with the A220.