Bombardier halts Learjet 85 and its share prices plunge
Bombardier has halted production on the proposed Learjet flagship, the Lear 85 with several analysts suggesting the “pause” could be permanent.
The Canadian manufacturer is to cut 1,000 jobs in Wichita and Mexico following the decision to “pause” the already delayed programme citing weak demand. The write-off is estimated to be around $1.4bn.
The all-composite Learjet 85 was launched in 2008 with plans for service entry by the end of 2013.
The company blamed delays initially on problems with certificating the design and manufacturing of the business jet's all-composite structure. The first test aircraft completed a maiden flight in April 2014 , but Bombardier executives declined to provide an updated schedule for entry into service.
The entire project was placed into a broader review of the company's development priorities instead, with the CSeries and Global 7000 and 8000 business jets given higher preference.
"Given the weakness of the market, we made the difficult decision to pause the Learjet 85 programme at this time," Bombardier president and chief executive Pierre Beaudoin, said. "We will focus our resources on our two other clean-sheet aircraft programmes under development."
However, the company’s new CSeries airliner programme is also delayed and the Montreal company has already axed 3,500 aerospace jobs.
Financial news agency Bloomberg quoted an analyst at National Bank of Canada Financial in Montreal, Cam Doerksen, as saying “It’s really not clear to me what ‘pause’ means. This is a pretty sizable charge, and this suggests to me this may be longer than a typical delay. This appears to be an indefinite pause.”
Bombardier’s share price dropped by more than 25% on the Toronto exchange.