Quebec Rules Out Pouring More Cash Into A220 Airbus Jet

(Bloomberg) -- If Quebec comes to the rescue of Bombardier Inc. again, it won’t be through the A220 jet program with Airbus SE.

Premier Francois Legault ruled out putting more money into the joint venture, following a $1 billion cash injection by the previous provincial government, which he called a “serious mistake.“ Additional cash for the unit is “out of the question,” he said.

“They should have invested in Bombardier, in the whole company,” he told reporters in Quebec City, broadcast by RDI, the French-language broadcaster. “Now we find ourselves in a situation where Airbus has the majority of shares, so it’s very difficult to make sure that cost sharing in that unit is done correctly.”

Montreal-based Bombardier said earlier this month it was reassessing the joint venture because costs for the new plane are rising, pushing out its break-even timeline. Under the terms of the deal in 2018, Bombardier ceded control to Airbus at no cost, while agreeing to fund cash shortfalls of up to $925 million over four years, according to a press release at the time. Any additional shortfalls would be shared by the investors, which include the Quebec government at 16%. The partners are in discussions about these added investments, with an update expected when Bombardier reports results on Feb. 13.

Still, Legault has signaled he may be ready to help Bombardier in another way.

To contact the reporter on this story: Sandrine Rastello in Montreal at srastello@bloomberg.net

To contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, Jacqueline Thorpe

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