Airbus Breaks Ground on New A220 Factory—On Boeing’s Turf
Matthew Greenwood posted on January 25, 2019 |
European planemaker to expand U.S. production capabilities to meet demand for regional jets.

Airbus recently held a groundbreaking ceremony in Mobile, Alabama, for a new facility that will produce the A220 regional jet.

The $300-million complex will facilitate assembly of the A220-100 and A220-300 jets for U.S. customers—helping Airbus meet the strong and growing domestic demand for the aircraft. The company plans to start building those planes in late 2019, while the facility is still being completed, and start delivering them in 2020.

More than 500 A220s have been ordered to date by customers such as Delta Air Lines and JetBlue, promising to keep the facility very busy.

The A220 production line is Airbus’ second U.S.-based commercial aircraft production facility and it will be located right next door to the company’s existing A320 assembly line at the Mobile Aeroplex at Brookley.

The investment is partly seen as a response to President Trump’s “America First” policies. It expands Airbus’ footprint in the U.S. at a time when protectionism and trade conflicts are making aerospace companies nervous. In the last three years, Airbus spent $48 billion in the U.S. with hundreds of American suppliers in more than 40 states. 

“When we did the deal with [Bombardier], it was obvious from the first minute that we should really produce this aircraft also in the United States in these times of protectionism and of nationalism and tariffs,” said Airbus CEO Tom Enders. “But also, the single largest market for this wonderful A220 is in North America.”

With this facility, the rivalry between Airbus and Boeing promises to stay heated. The A220 used to be the Bombardier C-Series until Airbus bought the Canadian company’s commercial jet operations last year. That deal strengthened Airbus’ hold on the growing market for narrow-body planes—aircraft with a capacity of 100-150 seats for regional air travel. Airbus anticipates that the narrow-body segment represents at least 7,000 planes over the next two decades, and the A220 is purposely built for that market.

The A220 is anticipated to cut into the market share of Boeing’s 737 Max. “The 737 is trending towards a 40 percent market share [of the narrow-body market] versus the A320/A220,” said Sash Tusa, analyst at Agency Partners. "That becomes an issue for Boeing: it could force them to launch a new narrow-body far earlier than they would like.”

Boeing may have another option, though: it negotiated a deal to buy a majority stake in Embraer’s commercial jet lines—a move widely seen as a reaction to the Airbus-Bombardier agreement.

It remains to be seen how Boeing will react to its chief rival expanding in its own backyard.

Check out what else Airbus has been up to at Airbus Launches Strategic Review of Its Operations.

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