Airbus and Boeing in joint deal to take over Spirit AeroSystems assets

Montreal — Europe’s Airbus has finalised an agreement to take some assets from Spirit AeroSystems, both companies said on Monday, completing a critical part of a transatlantic carve-up of the struggling supplier with US rival Boeing.

The US plane maker agreed last year to buy back the world’s largest independent aerostructures supplier two decades after spinning it off for $4.7bn in stock, while Airbus moved to take on its loss-making Europe-focused activities.

The unprecedented decision by competing plane giants to prevent a collapse of the world’s largest independent aerostructures supplier follows years of financial pressure on Spirit brought to a head by Boeing’s recent 737 MAX crisis.

Two plants involved in the transfer to Airbus are Kinston, North Carolina, where Spirit makes a crucial part of the A350 fuselage, and a plant in Belfast, Northern Ireland, that makes carbon-fibre wings for the A220. Certain activities in Morocco and France are also included.

Airbus said it would also acquire the production of wing components for A320 and A350 jets in Prestwick, Scotland.

Under the deal, Airbus will be compensated for taking on the loss-making production work by a payment of $439m from Spirit, though this is less than the $559m originally planned because of changes in the scope of the deal.

Jefferies analyst Chloe Lemarie said the new payment may not fully offset a drag of mid-three-digit millions of euros that Airbus expects on its 2025 cash flow from running the plants.

Even so, shares in the European plane maker rose about 2% as the deal lifted uncertainty about a critical part of the supply chain. Delays from Spirit have slowed A350 passenger jet deliveries and contributed to a freighter development delay.

However, both companies said they expected the complex three-way deal to close in the third quarter rather than midyear as previously indicated.

Airbus will meanwhile provide new interest-free credit lines worth $200m to Spirit, the companies said.

The deal leaves a question mark over part of the historic former Short Brothers plant in Belfast, Northern Ireland’s largest manufacturing employer, which was sold first to Canada’s Bombardier then to Spirit and now to Airbus.

Britain’s biggest union, Unite, has urged the country’s government to prevent a break-up of the Spirit operation that employs 2,600 people in Northern Ireland.

Spirit said Airbus would acquire the production of A220 wings in Belfast. In the event a suitable buyer is not found, Airbus would also take over production of the A220 mid-fuselage there.

Besides supplying Airbus, Spirit’s Belfast operation makes parts for Bombardier private jets and carries out work in defence and space. It lost $338m in 2023.

Letters sent this month to employees from Boeing Commercial Airplanes CEO Stephanie Pope and Spirit CEO Pat Shanahan suggest that some of the non-Airbus work in Belfast could go to Boeing by default if no alternatives are found.

The decision to move ahead with plans to dismantle Spirit and shore up its production lines comes as Boeing boosts production of its 737 MAX cash cow after a series of crises that weighed on output.

Spirit Aero, which produces the fuselage for the MAX, raised doubts last year about its ability to continue as a going concern, receiving financial help from both plane makers.

Airbus CFO Thomas Toepfer told shareholders earlier this month the company expected to complete the agreement with Spirit by the end of April and formally close the deal by June 30. 

Reuters