Refocusing Bombardier | The last Learjet rolled out of the factory

He cost her at least 2.5 billion US dollars, helped push her to the brink and now crowns her dismemberment. Bombardier is now drawing a line on the production of the Learjet business jet, but is not quite turning the page on this program which took off in the 1960s.

Julien Arsenault
The Press

With some 2,000 aircraft in service, Bombardier could hardly afford to part with this family of light business jets if it wanted to meet its 2025 objectives. The company wants to see its aftermarket services division – where margins are high – generate revenue of approximately 2 billion.

“That’s why we wanted to keep the Learjet,” recalls its president and CEO, Éric Martel, in an interview with The Press. These planes will need maintenance and parts for several more decades. »

The end of Learjet production was announced in the winter of 2021 by Mr. Martel. The final aircraft – a Learjet 75 – is due Monday from Wichita, where the jets are assembled, to Northern Jet Management. The end of this chapter does not lead to major changes in Quebec, but does not prevent the program from having contributed to the misfortunes of the company.

Mr. Martel was vice president and general manager of the Global and Challenger platforms in 2007 when the company made a decision that will have cost him at least 2.5 billion US dollars by launching the development of the Learjet 85, which was to be sold to around 18 million US and which never saw the light of day.

At the time, no one suspected that the global financial crisis would leave permanent scars in the market for smaller business jets. These aircraft are more vulnerable to the vagaries of the economy compared to midsize (Challenger) and large-cabin (Global) jets. Marked by delays, the Learjet 85 was abandoned in the fall of 2015 by Bombardier, plunged into financial turmoil. At that time, Mr. Martel headed the business aircraft division.

“We may have been a little stubborn at the time, saying that we were going to continue to develop it, concedes Mr. Martel. We said to ourselves: “Ah, the market will come back”, but it never came back. It completely collapsed and never resumed. Companies have become international. There were more needs to cross the ocean, to go further, to have a bigger cabin. »

Richard Aboulafia, managing director of the firm AeroDynamic Advisory, believes that Bombardier’s reasoning made sense at the time. Very few analysts anticipated such a long desert crossing in the light business jet segment.

“The crisis has complicated third-party financing for smaller aircraft,” says the analyst. Small companies, which typically purchased these aircraft, were much more cost sensitive. This has been observed much less in other spheres of the market. »

But with several simultaneous projects – including that of the C Series, which ultimately cost 7.1 billion US – the financial crisis should have prompted the aircraft manufacturer to put aside the Learjet 85, believes Mr. Aboulafia. It was the product most exposed to economic turbulence, he recalls.

Always helpful

Would Bombardier’s story have been different if the Learjet 85 had been discontinued earlier? When asked, the big boss of Bombardier, who left the company in 2015 before returning five years later, did not want to comment on this hypothesis.

“I think it’s a combination of factors,” replied Mr. Martel, referring to the difficulties of the rail division. There are several programs that were in development simultaneously. But it is definitely a factor [le Learjet 85] who contributed to the situation. »

Of the three major aeronautical projects developed simultaneously by Bombardier, only the Global 7500 remains, the company’s spearhead in large-cabin business jets. This program cost more than 4 billion US and also took longer than expected to complete.

There was never any question of permanently cutting ties with the Learjet, says Mr. Martel.

“Some have tried approaches, but we were not really interested, he says, without naming the suitors. We never got to an amount put on the table. »

Mr. Aboulafia believes that no one wanted to get their hands on the program without the fleet of aircraft in service. With strong demand in business aviation, Bombardier’s strategy makes “logical sense,” the analyst believes.

“These aircraft don’t generate the same maintenance revenue as Challengers and Globals, but they matter,” says Aboulafia. The company can also maintain relationships with customers who want to change planes and who could opt for more expensive jets. »

Co-founder of the Montreal firm of consulting services and specialized financing for business aviation Echo Aviation, Frederic Larue has observed a very different context for used Learjets since the start of the health crisis.

“Before the pandemic, when supply was abundant on the market, demand was relatively low,” he says. Given the current scarcity of planes, Learjets are selling relatively well even though orphan planes usually have a lower resale value. »

According to Mr. Larue, there have been a “hundred” of transactions involving Learjets around the world since the end of last year.