Learjet’s Fall From Luxe to Loser Reflects Rising Bar for Swank
(Bloomberg) -- Bombardier Inc.’s decision this week to pull the plug on the Learjet ushers in the end of what once was the ultimate symbol of success, whisking the powerful and the prominent across the skies.
Despite spending three decades and billions of dollars, efforts toward resuscitating the fading brand were simply no match for deep-pocketed rivals and an ever-rising bar for what defines luxury transport.
“This has been a long-time coming,” said Rolland Vincent, a private-jet industry consultant based in Plano, Texas. “It’s been on life support for a few years.”
Bombardier will halt production toward the end of this year, closing the book on a small jet born almost six decades ago. The shutdown will save the Montreal-based planemaker $400 million a year by 2023 as it focuses on the larger, more lucrative private jets in its paddock.
Modeled by inventor Bill Lear on a Swiss fighter aircraft, the Learjet soon became the chic ride for board chairmen and the Chairman of the Board. The Learjet so exemplified the message “I’ve made it” that James Brown posed with one on a Los Angeles tarmac, while Pink Floyd’s “Money” and Carly Simon’s “You’re So Vain” used it as a stand-in for success.
In 2009, though, the Learjet ran into stiff competition from the Phenom 300, a light jet produced by Brazil’s Embraer SA. The 300, and its smaller sister the Phenom 100, won over buyers with competitive prices and, perhaps most crucially, the need for only one pilot. Japan’s Honda Motor Co. jumped into the fray in 2015 and, a few years later, so did Switzerland’s Pilatus Aircraft Ltd.
Celebrities and the well-heeled moved on from the diminutive Learjet, which has a cabin height of less than five feet. They now covet top-of-the-line aircraft such as Bombardier’s own Global 7500, General Dynamics Corp.’s Gulfstream G650 and Dassault Aviation SA’s Falcon 8X, which fly faster, can cross continents and allow most adults to stand up on board.
“The Learjet is an iconic brand that was associated with elegant, sophisticated, stylish people who wanted to go fast,” said Janine Iannarelli, founder of Par Avion Ltd., a Houston-based broker for jet sales. “Today is a bit of a different story.”
Bombardier, which had bought Learjet in 1990, had attempted to keep up but was continually stymied. In 2007 the company unveiled the Learjet 85, which would be Bombardier’s first jet built from composite materials instead of aluminum and use new techniques for design, engineering and production.
But that experiment turned into “an industrial fiasco,” said Vincent, the Texas-based consultant. The project fell behind schedule just as Bombardier was bleeding cash on development of the C Series commercial airliner and the Global 7500, the world’s biggest private jet. Bombardier took at least $2.6 billion in charges related to the Learjet 85’s cancellation in 2015.
“It certainly took away any thought of more capex and research and development in Learjet, probably forever,” Vincent said.
Bombardier kept pressing on, though. In 2019 it tried to spruce up the Learjet 75, the brand’s only model still in production. Two seats were removed to give the remaining six passengers more room, and the cabin was upgraded. The company also slashed $4 million from the price to just below $10 million. But that still put the tab just slightly above that of Embraer’s Phenom 300.
“If anything killed the Learjet line, it was the Phenom investment and entry,” Vincent said. “The waters now are very full of sharks and it’s a tough place to make money for Bombardier, so they moved away.”
Bombardier said it remained committed to Learjet owners and operators after making what CEO Eric Martel called a “difficult decision” to halt production.
Today, the plane that once ferried Frank Sinatra and the Rat Pack to the Vegas Strip has been downgraded to workhorse status, taking executives of midsize companies to remote factories. The wealthy who fly themselves to the slopes in Utah would just as soon use a plane that only needs only one person at the controls.
“Other small jets out there are cheaper to operate and more forgiving to fly,” said Iannarelli, the broker.
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