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Bombardier takes $4.9 billion hit, cancels Learjet 85

Learjet 85 on the assembly line in a 2012 photo. Photo courtesy of Bombardier.

Bombardier has reported a $4.9 billion loss for the third quarter of 2015 mainly due to development of the C Series 110- and 135-passenger airliners and the Learjet 85, and has received a $1 billion investment and partnership from the government of Quebec to complete certification of the airliners. Learjet 85 losses amounted to $1.2 billion of the $4.9-billion total. Bombardier canceled the program Oct. 28 as a result. The eight-passenger, two-crew Learjet 85 had been paused since January to concentrate on the C Series airliners and the Global 7000/8000 programs.

Engines have been mounted on the first Global 7000 flight test aircraft, with a second test aircraft in production. Two additional flight test aircraft are in various stages of production. The 7000, expected to enter service in 2016, and the 8000, entering service in 2017, are ultra-long-range aircraft cruising at Mach 0.85 and 0.90, respectively. The 7000 has a range of 7,300 nautical miles, while the 8000 has a 7,900-nm range. Both use the GE Passport 20 engine.

Bombardier has accepted the government of Quebec as a 49.5-percent equity partner in the C Series program. The money will be used for cash flow for the C Series. For the three-month period ending Sept. 30, cash flow usage amounted to $816 million, compared to a usage of $368 million for the same period last year.

The $4.9-billion loss for the third quarter, or $2.20 per share, from the C Series and the now-canceled Learjet 85, compares to a net income of $74 million for the third quarter of 2014.

“We are taking the right actions and we have solidified our liquidity position, giving us the confidence to execute our long-term strategic plan,” said Alain Bellemare, president and CEO of Bombardier.

Helping to offset aircraft losses are strong orders for Bombardier trains.

The company said 90 percent of the CS100 airliner certification program is complete. The CS300 certification program is more than 60 percent complete. Assembly of a second CS300 flight test aircraft is in progress. Passengers have ridden in the CS100 to test the cabin.

Alton Marsh

Alton K. Marsh

Freelance journalist
Alton K. Marsh is a former senior editor of AOPA Pilot and is now a freelance journalist specializing in aviation topics.
Topics: Financial, Aviation Industry

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