CORRECTED (OFFICIAL)-UPDATE 1-Airbus seeks hefty cost cuts for Canadian A220 jet

MONTREAL (Reuters) – Europe’s Airbus is looking for a “significant double-digit” percentage reduction in costs for a recently acquired Canadian jet program, as it expands production capacity to cope with anticipated demand for the former Bombardier jet. Philippe Balducchi, head of an Airbus-led venture which took over production of the loss-making A220 last year, indicated the bulk of the reduction in costs would come from the supply chain as Airbus uses its greater clout in negotiations for parts. Other savings would come from more efficient operations as workers gain experience of building the lightweight 110-130-seat jet, whose deliveries doubled to 33 aircraft last year. But overall economies will go “way beyond” what Airbus can achieve internally on the assembly line, Balducchi said. “Our focus is to sell, ramp up (production) and reduce costs on the A220,” Rob Dewar, head of engineering and customer support, added during a media briefing on the jet, which was known as the CSeries until Airbus took control in July 2018. The A220 consortium, which also includes Bombardier and the Quebec government, is spending some $30 million to expand its Mirabel production plant outside Montreal and will break ground this week on a new assembly line in Alabama for U.S. airlines. Airbus meanwhile said the Canadian-developed A220 jet had won approval to fly up to three hours away from the nearest airport in the event of a shutdown of one of its two engines – a safety standard which underpins its use on longer-range routes. The green light has been given by Canada, while approvals in the United States and Europe are pending, Airbus officials said. The extended operations or ETOPS approval affects the number of routes the plane can fly over water or remote areas. (This story corrects last para to show that US/European approval still pending after Airbus officials clarify earlier comments)

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