Dive Brief:
- Spirit AeroSystems announced on Monday it reached a $439 million agreement to sell some of its factory sites and production to its second-largest customer, Airbus.
- The pending deal includes the Airbus 350 fuselage package at Spirit AeroSystems’ Kinston, North Carolina, site, and the A220 pylon production at the Wichita, Kansas, facility, according to the press release.
- The sale is expected to close concurrently with Boeing’s $4.7 billion acquisition of Spirit AeroSystems in the third quarter.
Dive Insight:
In addition to Spirit AeroSystems’ U.S.-based commercial production sites, Airbus is set to acquire the supplier’s assets primarily related to its aircraft in the U.K., Europe and Africa. The assets include:
- The A350 fuselage section at the St. Nazaire, France, location;
- The A321 and A220 aerostructure components at the Casablanca, Morocco, facility;
- The A320’s components and A350 wings production at the Prestwick, Scotland, plant and
- The A220 wings production in Belfast, Northern Ireland.
Airbus could acquire the remainder of the Belfast facility, as well as aircraft-related assets at the Subang, Malaysia, site, if Spirit AeroSystems does not find a buyer by the time the deal is finalized, the company said in the release.
Spirit AeroSystems and Airbus have been in pricing negotiations for the A350 and A220 programs since 2023. But when the Alaska Airlines door plug blowout occurred in January 2024, the incident threw a wrench into the negotiations.
Following the incident, Boeing implemented extra precautions in fuselage production at the Wichita facility and announced plans to acquire the company. The acquisition plans led to Boeing’s involvement in the Airbus negotiations and the two competitors discussed how to split their supplier’s operations based on each of their commercial aircraft needs.
In addition to the facility acquisitions, Airbus agreed to provide Spirit AeroSystems a $200 million line of credit to support Airbus’ aircraft programs, according to a securities filing dated April 28. The deal took effect on April 22.
It’s not the first time Airbus has provided funds to the struggling supplier. Airbus lent Spirit AeroSystems a $107 million line of credit without interest in November 2024. In 2023, Spirit AeroSystems received $100 million from Airbus, according to a securities filing.
Boeing and Airbus are Spirit AeroSystems’ largest customers, with 58% and 21% of the company’s revenue generated from the two customers’ sales, respectively, according to its FY2024 annual securities filing.
The supplier’s pending deals come as it tries to stay afloat. Spirit AeroSystems reported a $2.14 billion net loss last year, primarily due to production and delivery changes implemented by Boeing. Despite last year’s financial advances from Airbus and Boeing, Spirit AeroSystems said it will need to secure additional funding to sustain operations as it expects losses to continue for the foreseeable future.
