Demand for Learjet models remains weak

-- Dec. 03--The market for Bombardier Learjet models continues to be weak, the head of the company's aerospace business said Thursday. "At this segment of the market, it's not only slow for Learjet," Guy Hachey, president and chief operating...


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Dec. 03--The market for Bombardier Learjet models continues to be weak, the head of the company's aerospace business said Thursday. "At this segment of the market, it's not only slow for Learjet," Guy Hachey, president and chief operating officer of Bombardier Aerospace, said during a conference call after Bombardier reported its third-quarter financial results.

It's slow for all manufacturers -- including Cessna Aircraft and Hawker Beechcraft -- that produce light and medium-size business aircraft.

"It's really a dogfight at that end of the marketplace," Hachey said. Pricing is "difficult."

He said Learjet production is at the appropriate level for the demand.

"We're running very low rates (of production) compared to where we were a couple of years ago," he said of Learjets.

The company expects to see an improvement in sales and deliveries in the fourth quarter.

"We'll be very aggressive in the fourth quarter in Learjet," Hachey said.

Bombardier reported that revenue and earnings were down for the third quarter.

Revenue totaled $4 billion, compared with $4.6 billion in the third quarter of 2009. Earnings before financing income, financing expense and income taxes totaled $228 million, compared with $262 million last year.

Net income amounted to $143 million, compared with $168 million during the third quarter last year.

Revenue in its aerospace business totaled $1.8 billion, compared with $2.1 billion in the third quarter of 2009.

The aerospace segment recorded 23 net orders during the quarter, up from seven a year ago. And it delivered 53 aircraft, compared with 61 a year ago.

The company's backlog for aircraft was $16.2 billion on Oct. 31, down from $16.7 billion on Jan. 31.

The company has a seven-month backlog of orders for Learjets.

It also must work through some "white tails," planes that have been built but not sold. The company declined to say how many there are other than there are "quite a few."

"Some" workers were laid off during the last quarter at the Learjet plant in Wichita. They were part of the layoffs announced two years ago, Hachey said. A few are still "trickling out."

Earlier this year, the company expected an increase in business jet orders in the second half of the year.

"It turned out, that's different," Hachey said.

Over the past year, "some months we felt very good," he said. "In the summertime, we felt very good. Then it quieted down."

But November was a good month. He hopes that continues.

The company is hoping not to see further deterioration in the market, Hachey said.

"It's a very nervous market at this point," said Bombardier president and CEO Pierre Beaudoin. "It's very hard to read right now."

Most of the orders for business jets are coming from outside the U.S., Hachey said.

The market for large business jets is doing better than small jets -- an indication of stronger international sales, Beaudoin said.

Bombardier expects to deliver approximately 15 percent fewer business aircraft in fiscal 2011 compared with 2010 and 20 percent fewer commercial aircraft.

"While both markets are affected by the recession, we believe that the market fundamentals are strong in the long-term for new business and commercial aircraft," the company said.

Reach Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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