Dear Fellow Carnivorous Reptile Watchers,
Learjet! Dead! Not Learjet! The first Learjet flew in October 1963, a few months after I was born. My mother worked as a secretary in their Connecticut office. It was purchased by Bombardier in 1990, the very year I started covering aircraft as an analyst at Teal Group. At the time, Bombardier was the third biggest company in my aircraft coverage universe.
But this letter isn’t about me. It’s merely a brief history of Bombardier’s near-total destruction, and a quick assessment of what’s left after all the smoke clears, and how survivable this will be. Looking back, from the latest round of destroyed value, here’s the ex-BBD list:
1. The Dash 8Q turboprop. Longview Aviation Capital acquired this long-running transport from Bombardier in May 2019. Also this month, Viking/Longview said it was “pausing” Dash 8Q production. Is it dead? Well, who hasn’t been tempted to tell their kids that the family pet had been “paused?” Viking, by the way, also owns the 19-seat Dash 6 prop, which seems to have been “paused” this month, too.
2. CL-415. The delightfully bulbous waterbomber, in production since the 1970s, was also sold to Viking in 2016. The plan was to re-birth it as the CL-515. But in December Viking “elected to slide the formal launch of the CL-515” to an indeterminate date. See under “paused.”
3. The CRJ. Canada’s most successful transport, ever, had been sold off to Mitsubishi in 2019/2020. Or, rather, the CRJ’s service and support centers were sold off, to provide support for the Mitsubishi Regional Jet. Without the service centers, the rest of the CRJ program (still owned by BBD, weirdly) is dead. And Mitsubishi’s MRJ death last year means the CRJ service centers will die after the last CRJ retires in 20 years or so, or, will be dead if nobody uses these centers for a new aircraft program (most complicated aircraft death, ever).
4. Structures. Bombardier’s large Belfast and Casablanca-based aerostructures business (including the great Shorts legacy operation) was sold to Spirit AeroSystems in 2019/2020. Bombardier has also jettisoned everything else in its supply chain. This month, the company’s Querétaro-based wiring unit was sold to Latécoère. That ended Bombardier’s once-significant role as an aviation supplier company.
5. Bombardier Transportation. With its train unit complementing all its air transport programs (and, prior to 2003, snowmobiles!), BBD could plausibly claim to be a global transportation solutions company. Once, BBD could even plausibly discuss major infrastructure opportunities in key developing markets, like China. The Trains unit was sold to Alstom in January.
6. Training services. In March 2019, the company sold its Business Aircraft Training unit to CAE. CAE, by the way, just bought L3Harris Technologies’ Military Training unit. Canada may be hemorrhaging aircraft programs, but at least they’re training everyone in the industry.
7. CSeries. The jetliner that caused all of this incredible destruction. Given away (with generous sweeteners) to Airbus, starting in 2017 and ending in 2020. As the A220, its now doing much better, in more capable hands. The net effect of developing this jet on Bombardier’s other units wasn’t pretty. In fact, it was rather like throwing a velociraptor into a bunny farm.
The last rabbit remaining: large, expensive business jets (Challenger 350/650, Global 5500/6500/7500). That is all Bombardier has left. And, these are Canada’s last fixed-wing aircraft. As Bank of America’s Ron Epstein points out, Bombardier is now the world’s first and only pure-play, publicly-traded large business jet prime.
Is this position survivable? Bombardier’s recent Investor Day presentation made a case for optimism, predicated on a strong utilization/aftermarket recovery, along with continued positive momentum for new build large cabin demand. The product line is actually in good shape (although the 650 needs replacement). But the company has a serious debt problem (that velociraptor was an expensive pet). Most of all, they face a very aggressive, much healthier direct competitor (Gulfstream/General Dynamics). Their other big competitor, Dassault, like Gulfstream, has a deep-pocketed defense company behind it.
In short, Bombardier’s recovery, or, rather, the recovery of the last bit remaining of this once-mighty aviation powerhouse, depends on factors way behind their control. To repurpose an old theological joke, if you want to make God laugh, tell him your financial targets.
If things go well, the company can make a go of it as one of the top two business jet primes. But if things don’t go as planned, well, the future ownership of these surviving programs will be much less Canadian. That’s nothing new. Canadair, Bombardier’s original business jet core (and, again, all that’s left), was owned in 1946-1976 by General Dynamics (and its predecessor companies), the current owner of Gulfstream. I’d put Textron and Northrop Grumman, and perhaps even Airbus, high on the list of possible BBD acquirers. If that sale happens, it will cap a truly remarkable record of destruction and disintegration.
But back to Learjet. And back to me. I grew up in a time when these planes symbolized aspirational wealth and modernist style. Carly Simon’s You’re So Vain, which always seemed to be playing on my childhood AM clock radio, name-checked Learjets for every good reason. Aviation Week’s Molly McMillin has a lovely Learjet retrospective at tinyurl.com/v6444rw8. And, as Rollie Vincent of JetNet iQ wrote this month, “For Bill Lear and his team, it was an incredible time of boundless possibilities – for doing things that everyone said could not be done.”
Aerospace, and society, will still see great things ahead. But it’s also hard to not see this as the end of a glorious mid-century modern future.
Yours, ‘Til We Get A Better Future,
Richard Aboulafia