Learjet 85: Pause for thought
Bombardier has paused the Learjet 85 because of weak demand. And the CSeries.
It is not a massive surprise, but Bombardier’s announcement that it is “pausing” the launch of the Learjet 85 is a depressing one. Bombardier says that it cannot sell enough Learjet 85s to justify launching it.
Bombardier says that lack of sales is not just an issue with the $18 million Learjet 85. In an investor call, Pierre Beaudoin, CEO of Bombardier, said demand for new Learjets is weak. He said that the company has a very low Learjet backlog and is effectively building aircraft as it sells them.
“We keep saying it’s going to bounce back next year. We’ve been patient for quite a few years.”
“We keep saying it’s going to bounce back next year,” said Beaudoin. “We’ve been patient for quite a few years.”
Bombardier said that many customers had already switched to other models and that customer deposits for the Learjet 85 were not significant. Directional Capital’s FlexJet was the programme’s biggest customer with 60 firm orders. Kenn Ricci, founder of Directional Capital says they will look at other options.
Beaudoin stresses that it is a “pause” and not a cancellation. “Right now we don’t see a pick up at the rate we anticipated so we think it is a good time to take a pause,” he said.
It is important not to be too downbeat. Bombardier delivered 204 business jets in 2014 up from 180 business jets in 2013. Orders were down but this was mainly because there were several large fleet orders in 2013. However, Bombardier only sold 30 aircraft in the last quarter of 2014, a disappointment in what is usually its strongest quarter. It has already delivered some of these aircraft.
Bombardier would have been more optimistic if it did not also have to fund the CSeries and Global 7000 and Global 8000 programmes. OEMs overuse the term game-changer aircraft, but the CSeries really is one. By launching the programme, Bombardier completely changed the commercial narrowbody market by forcing Airbus and Boeing to improve their own products – with the Airbus Neo and Boeing Max programmes. Unfortunately Bombardier has not benefited from this shift. In a just world, airlines would thank the Canadian manufacturer by buying CSeries aircraft.