Aviation

Is Bombardier ‘winding down’ Learjet?

The Learjet 75, seen here at Bombardier’s site at Wichita Eisenhower National Airport, is one of only two Learjets currently in production.
The Learjet 75, seen here at Bombardier’s site at Wichita Eisenhower National Airport, is one of only two Learjets currently in production. File photo

It has been nearly four years since Bombardier Business Aircraft has certified a new Learjet.

In that time, competitors Cessna and Embraer have received Federal Aviation Administration type certification on at least nine clean-sheet or upgraded light and midsize business jets.

That doesn’t include Cirrus, which last fall certified its first business jet, the Vision, and Honda Aircraft’s HondaJet, which was awarded type certification in 2015.

Bombardier’s Learjet 70 and 75, both of which were type certified in late 2013, are the sole aircraft produced at the Montreal-based company’s Wichita plant.

And they’re showing signs of weakening demand.

Bombardier Learjet demonstration pilot Jeff Triphahn explains a performance climb in a Wichita-built Learjet 75 during a flight last week. (June 15, 2016)

With no other Learjets on the drawing board — at least none that Bombardier has announced — it’s leaving some in the industry pondering the fate of the historic aviation brand.

In the business aviation industry, it’s important for manufacturers to have a consistent cycle of new or upgraded aircraft.

“What I don’t understand is their approach,” said business aviation forecaster Rolland Vincent, who for six years in the 1990s worked at Bombardier. “Their approach, from an outsider’s perspective, is like they’re winding it (Learjet) down.”

Bombardier officials didn’t directly answer questions about the company’s long-term plans for Learjet, including new aircraft development and its operations.

“Bombardier continues to invest in its products with new innovations, such as the pocket door on Learjet 75, which provides a more comfortable and quieter cabin for passengers,” the company said in an e-mailed statement to The Eagle.

That new pocket door was introduced last year at the European Business Aviation Association Convention and Exposition in Geneva, Switzerland, but it’s not clear what effect it has had on sales of its Learjet 75, deliveries of which hit their lowest level in 2016.

In Bombardier’s first full year of production, which was 2014, it delivered 33 Learjet 70s and 75s. The following year, deliveries for the two jets — Bombardier said in the statement it doesn’t provide delivery figures per model — totaled 32.

And last year the company delivered 24 Learjets, a 25 percent drop from 2015.

Should the trend continue — Vincent’s firm, JetNet iQ, shows 10 Learjet 70/75 deliveries in 2017 — and with no new Learjets in the pipeline, Teal Group analyst Richard Aboulafia said Learjet’s future appears dim.

“I expect nothing good unless they can sell it (the Learjet plant), which doesn’t seem likely,” Aboulafia said. “I don’t think they’re going to put more product development resources into it.”

Aurora Jet Partners president Bill McGoey talks about his company's acquisition of Bombardier's 75th Learjet 75. Video by Jerry Siebenmark/The Wichita Eagle/Feb. 24, 2016

Saj Ahmad, chief analyst of StrategicAero Research in London, said he thinks the Learjet 70 and 75 could be the last planes in the brand’s nearly 54-year history.

“The Lear family will almost certainly evaporate and with no replacement lined up, this is another quiet exit strategy for Bombardier,” Ahmad said in an e-mail.

Learjet 85 revival?

Even amid the falling 70/75 deliveries, there has been some speculation in the industry that Bombardier could revive its last new jet development program, the Learjet 85, which the company scrapped nearly 1 1/2 years ago.

After announcing a pause in January 2015 in developing what was to be the biggest and longest-range Learjet in the brand’s history, Bombardier killed the program altogether in October 2015. That cost the company more than $2.5 billion in write-offs and caused more than 1,000 workers, including 600 in Wichita, to lose their jobs.

Bombardier officials said at the time the combination of a “soft market” for the composite, midsize business jet and the company’s two other aircraft development programs – the C Series narrowbody airliner and the large-cabin, long-range Global 7000 – led to the scrapping of the 85.

“That was a challenge for an organization our size,” Bombardier CEO Alain Bellemare told analysts on the October 2015 conference call, “… too many initiatives or projects ongoing in parallel.”

Still, with much of the 85’s development costs absorbed, and the tooling and intellectual property in place, reviving the 85 wouldn’t be as costly this time around, some have speculated.

But in its statement this week, Bombardier reiterated there will be no revival.

“There are no plans to bring back the Learjet 85 aircraft program following its cancellation,” Bombardier’s statement said.

Analysts said reviving the jet would be problematic.

I think they reached a point where additional costs (to bring the Learjet 85 to market) were substantial. The prices they were likely to get might not have even covered recurring costs and were starting to get perilously close to the Challenger 350.

Richard Aboulafia, Teal Group analyst

“What would it get you?” Aboulafia said. “I think they reached a point where additional costs (to bring the Learjet 85 to market) were substantial. The prices they were likely to get might not have even covered recurring costs and were starting to get perilously close to the Challenger 350.”

The Challenger 350 is a larger business jet manufactured by Bombardier in Canada.

Vincent said the company also had trouble getting “good repeatability, good quality” manufacturing for the all-composite Learjet 85.

It seems to Vincent that Bombardier’s leaders “don’t have any appetite for the low end” of the business jet market, where margins are much tighter and competitors are more numerous.

To be clear, Bombardier’s operations at Wichita Eisenhower National Airport aren’t singularly focused on manufacturing Learjets, nor are all of the 1,700 employees who work there.

Bombardier wouldn’t disclose how many directly work for Learjet.

Bombardier has three other operations at its Wichita site. Those operations comprise its flight test center — where the C Series, Global 7000 and other Bombardier aircraft undergo flight testing and certification — as well as a missions group that adapts its current lineup of aircraft for specialized uses including military, search and rescue, and surveillance.

It also has an aircraft service center that in the past year or so has expanded its operations to include service on not only Learjets but also its larger Challenger and Global business jets.

“The multifaceted site in Wichita remains strategically important to the future success of Bombardier,” the company said in its statement to The Eagle.

Vincent said that if Bombardier is quietly attempting to wind down Learjet, it’s an unfortunate move.

To me, there is equity in the brand. It’s still got magic. It’s still got panache.

Rolland Vincent, business aviation forecaster

“To me, there is equity in the brand,” he said. “It’s still got magic. It’s still got panache.

“I don’t think they have a strategy for Learjet, other than to wait for the market to come back. But the market is going to Embraer and Textron … (which) have fresh product.”

Jerry Siebenmark: 316-268-6576, @jsiebenmark

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