Bombardier terminates $1.5 billion jet deal

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Bombardier Inc. said Thursday it has terminated a $1.5 billion deal with private-jet charter company Jet Republic for 110 Learjet 60 XR aircraft.

The cancellation comes a little over a week after the Montreal aircraft and rail equipment company ended a purchase agreement with Italian airline My Way Airlines, citing that carrier’s “uncertain situation.”

Bombardier didn’t provide a reason for terminating the Jet Republic order, though the Lisbon-based carrier has been struggling to line up financing.

When Jet Republic signed the deal in June 2008, the order was described as the largest European business aircraft order ever. It included 25 firm orders and 85 conditional orders.

Jet Republic was launched a year ago, bucking the gloom of the global economic slowdown, including weakened demand for high-end products and services. Jet Republic was scheduled to begin using the Learjet fleet in October.

The order cancellation raises questions about whether Bombardier will experience further backlog erosion as the business-jet slump continues, Versant Partners analyst Cameron Doerksen wrote in a research note Thursday.

Bombardier said it remains committed to the Learjet 60 XR program and production of the aircraft at its Learjet facility in Wichita, Kan., continues as planned.