No decision now about long-term plans for Learjet in Wichita, CEO says

What’s the plan for Learjet?

It’s a question that emerged Friday morning during a second-quarter 2017 earnings call between Bombardier Inc. executives and financial analysts.

It’s also one that has been posed in earnings calls off and on since the Canadian plane and trainmaker paused — and later killed — development of the Learjet 85 in January 2015.

This time, the question came from Ron Epstein of Bank of America, who asked CEO Alain Bellemare about Bombardier’s strategy for the part of the company’s 1,600-employee Wichita site that assembles Learjet 70s and 75s.

Epstein asserted Learjet deliveries for the second quarter were low: three Learjet 70/75s compared with five in the second quarter of 2016.

“We keep on driving sales,” Bellemare said. “The team is doing a good job, and actually we’ve seen a little bit of pick up in the past few months.”

Bellemare hinted a more definitive Learjet plan could be coming at some point.

“We’ve always said we like the brand,” he said. “It’s a great aircraft. It’s got way more value than its competitors. We’ve just got to make sure we increase volume over time.

“As you know, the business aircraft market is a little bit soft, so we decided not to make a decision now.”

Fewer deliveries were not limited to Learjet. The Montreal-based company also reported lower deliveries of its larger Challenger jets — 18 compared with 23 in the second quarter of 2016.

But deliveries of its largest business jets, the Global 5000 and 6000, increased by one plane year-over-year for a total of 15.

For the first half of 2017, Bombardier’s total business jet deliveries were 23 compared with 28 a year ago. The Learjet 70/75 was the only segment of its business aircraft to see a rise in deliveries, from six in the first half of 2016 to eight in the same period in 2017.

Here are three other takeaways from Friday’s earnings call:

▪ Profit margins at Bombardier Business Aircraft improved during the quarter, leading the company to expect a full-year 2017 margin of 8 percent on revenue of $5 billion from deliveries of 135 business jets.

▪ Bellemare said the overall business jet market is stabilizing, market sentiment is increasing and used business jet inventory is decreasing.

▪ The fourth and fifth Global 7000 test jets are in the advanced stages of assembly, and the company’s largest and longest-range business jet remains on track for entry into service in the second half of 2018.

This story was originally published July 28, 2017 at 6:54 AM with the headline "No decision now about long-term plans for Learjet in Wichita, CEO says."