- Spirit Aerosystems seeks Airbus contract renegotiation.
- CEO Patrick Shanahan confident.
- Financial challenges and losses discussed.
The Belfast-based manufacturer of components for Airbus passenger aircraft is seeking to renegotiate the terms of its contract with the aircraft producer.
Patrick Shanahan, the company’s chief executive officer, expressed confidence that the two companies will reach “a reasonable outcome.”
Spirit Aerosystems manufactures the Airbus A220’s wings.
Past Financial Challenges
Spirit has had a presence in Northern Ireland ever since it acquired the operations of Bombardier in 2019.
The agreement brought a lengthy period of uncertainty to an end, affecting approximately 3,000 workers in Northern Ireland.
The company disclosed unfavorable financial outcomes for the second quarter of 2023 in August.
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It caused the production of Boeing and Airbus aircraft to incur losses of $105 million (£82 million) and projected a challenging cash flow outlook for the remainder of the year.
The A220 program was one of the commercial operations that incurred losses.
Former Spirit CEO Tom Gentile stated at the time that the company “placed a substantial wager on the A220 program.”
Boeing agreement
Spirit and Boeing have recently struck an agreement regarding the costs incurred for maintenance on the 787 Dreamliner and the 737.
Mr. Shanahan was addressing financial analysts during the third-quarter results report for Spirit.
He stated that the negotiation process with Airbus is remarkably similar to that of Boeing.
We’re committed to Airbus, and I think they’re committed to us,” said the executive.
“But I’m encouraged, based on the Boeing agreement, that we’ll get there with Airbus,” he indicated to the analysts.
Mr. Shanahan suggested that the actual cost of the A220 wings had been difficult to ascertain during the scaling-up of production due to the novel process used to manufacture them.
“The performance that we should be realizing out of the manufacturing system just isn’t there, but I think it’s inherently not there,” according to him.
“We must reach a resolution with Airbus to rectify that discontinuity.”
Optimism for Airbus Resolution
“I think we’ll be able to get to the place that makes sense for both parties.”
