(Bloomberg) -- Quebec will make a new investment of “several hundred million dollars” to help Airbus SE ramp up production of its narrow-body aircraft in the Canadian province, bringing its total outlay to more than $2 billion (US$1.5 billion), according to a report from La Presse.
Quebec invested $1 billion in 2015 for a 49.5% stake in the jet program when it was owned by Bombardier Inc. Three years later, Airbus took control of the line, which was renamed the A220, but it has been a consistent money-loser.
The provincial government put in another $300 million in 2022 and its ownership is now 25%. As of last year, the value of that stake had fallen to about $300 million — effectively wiping out the original investment.
Airbus has the A220 won’t be profitable until 2026, a projection that depends on the manufacturer’s ability to raise output to 14 jets a month between its factories in Mirabel, Quebec, and Mobile, Alabama.
The Quebec government is topping up its funding in order to protect the value of its investment and to extend the 2030 deadline by which Airbus would otherwise be able to buy back its minority stake, La Presse reported. The government is betting on a better return if it gives Airbus more time to turn a profit from the A220, the French-language news site said.
Quebec Premier Francois Legault and Economy Minister Pierre Fitzgibbon plan to announce the increased investment at the Mirabel factory Tuesday afternoon.
--With assistance from Mathieu Dion.
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