Airbus is aiming for a mid-year completion of a transaction to acquire Spirit AeroSystems work packages, but acknowledges that the complex deal is taking longer than expected.
Spirit is being acquired by Boeing which has spurred Airbus to take ownership of key aerostructure work undertaken by Spirit, notably on the A350 and A220 programmes.
Airbus previously signed a binding term sheet covering specific aspects of the planned acquisition.
Chief financial officer Thomas Toepfer, speaking during a full-year briefing on 20 February, said this was a “defensive move” to secure immediate operations and the future of the work packages, and provide certainty to employees and the supply chain.
He says the airframer has since “progressed on due diligence” while assessing the “most suitable” ways to integrate each Spirit production site into Airbus’s operating model.
“Because of the number of stakeholders involved, more time is required to finalise the transaction,” he says. Airbus is working on a “realistic” assumption that the deal will close by 1 July.
Toepfer says the transaction is “complex” and the parties have had to cope with other factors including the recent Boeing strike, which led to disruption at Spirit and was “not helpful” for the work packages Airbus is seeking to acquire.
As Airbus gained more in-depth knowledge of Spirit’s operational situation, Toepfer adds, the financial outlook became “more challenging than we had originally anticipated”.
But he says that, through the due-diligence effort, Airbus has a “very clear picture” of the investment needed to increase Spirit’s production capabilities and support planned ramp-up of the A350 and A220 programmes.
Spirit’s Airbus packages are loss-making and operational efficiency needs to be improved, he says, adding that the firm “clearly is a bottleneck” because is it unable to increase output.
“That’s a drag on ramp-up of the A350 and A220,” adds Toepfer. He says the airframer’s focus over the next three years is to implement capital expenditure to bring Spirit to a point where it can support the production plans for both aircraft programmes.
“It’s about integrating the company into our operations so the processes will be improved,” he says, but states that Airbus will “have to suffer” the losses until the Spirit work packages are turned around.
“Once we’re done with investment and optimisation we want to make at Spirit, we’re expecting we’ll turn around these work packages to the same level of cost we’re currently paying externally,” says Toepfer.
“Therefore the impact beyond 2028 shouldn’t be a negative one coming from Spirit, once we’ve made the necessary improvements both in terms of processes and capital investment.”
Airbus chief executive Guillaume Faury says the Spirit situation is affecting production plans for both the passenger A350 and the new A350 freighter, and the freighter’s entry-into-service has been delayed to 2027.
But he says that the airframer is maintaining plans to increase A350 output to 12 aircraft per month in 2028, acknowledging that this will probably require acceleration of the ramp-up once the Spirit problems are resolved.
