Recipe for relaunching aerospace sector missing public support, report says

MONTREAL – The aerospace industry is calling for government funding to help it weather the turbulence caused by the COVID-19 pandemic, even as some in the sector say it must also work to change public perceptions and rally taxpayers to its cause.

“This public aid is often criticized in the media, by the general public,” said Suzanne Benoit, CEO of Aero Montreal, which advocates for the industry.

The comments were made Monday as part of the unveiling of an action plan for the aerospace and air transport sectors prepared by Aero Montreal and the Montreal Board of Trade.

“Unfortunately, there is a misunderstanding, I would say, on the part of the public, and really, it’s up to us to make this effort to educate people.”

Yet government support is needed, she argued, since competition is fierce and companies in the United States and Europe benefit from various forms of public support.

In addition, she said, the U.S. and several countries in Europe quickly provided billions of dollars in sector aid when the pandemic broke, while the Trudeau government is still reviewing numerous appeals.

The document released Monday underlines that “governments must act quickly.”

In recent years, sectoral aid has been criticized, especially in the wake of the problems that surrounded Bombardier’s financial situation, which led to major restructurings and waves of layoffs following development of the C Series, now called A220 and owned by Airbus SAS.

Before the pandemic, Quebec’s aeronautics industry had some 43,400 jobs and generated sales of $18 billion, or nearly 60 per cent of the sector’s total revenues nationally, said Benoit.

However, since the onset of the crisis, some 4,400 jobs have been lost after layoffs at Bombardier, Pratt & Whitney Canada and Airbus Canada. The cuts are probably not over, since the recovery will extend over several years.

Airbus Canada chief Philippe Balducchi, who has worked at Mirabel, Que., since the European aircraft manufacturer gained control of the C Series, also noticed that aeronautics did not have the same image in Canada.

“In France, aeronautics is considered a high-tech sector of the future,” explained Balducchi during a telephone interview after the event.

“I don’t feel that here. I don’t feel this awareness that it’s a complex and modern industry.”

In order to help Quebec maintain its third place internationally in aerospace, the report suggests investing in research and development projects, in particular for a “green” aircraft, financially supporting companies, supporting development, the defence sector and resuming domestic and international flights in a “safe” manner.

While it presents many possible solutions, the document underlines that “robust and rapid intervention is called for,” not only for manufacturing companies, but also for airlines and airports.

Federal Economic Development Minister Melanie Joly did not give event participants clear signals when asked about aid to the aerospace industry.

“Canada has the size, the strength and the stature to manage the pandemic and come out of the crisis,” she said when questioned by Board of Trade president Michel Leblanc. “Our goal is to be there to help our aerospace sector, but we have to do it intelligently.”

Air Canada vice-president of planning and network Mark Galardo said he saw “a little indifference” about a financial boost for the airline industry. Some have argued carriers should refund travellers the money they spent on tickets for flights that were subsequently cancelled before they can qualify for government assistance.

Balducchi said airline problems had repercussions at Airbus in Mirabel, where the ramp-up of production was put on ice. The current situation also undermines its efforts to lower A220 production costs, he said.

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