Analyst: Bombardier Inc. May Sell Learjet Business To Textron Inc.

Analysts at Cowen and Co. claim that it is “increasingly plausible” that Bombardier Inc. will sell its Learjet business and Cessna-maker Textron Inc. may be the lucky buyer.

Bombardier stated that the market for private aircraft seems to be at “a low part of the cycle,” especially when it comes to the demand for light jets like the Lear.

CEO Alain Bellemare mentioned that he is critically inspecting the business which is undergoing “significant pricing pressures,” yet he failed to say whether he is considering a sale.

Cai von Rumohr, a Cowen analyst said the divestiture of Learjet more likely to help Bombardier in relieving it of its debt burden, also including $6.7 billion maturing in 2018-23.

Writing to clients, von Rumohr said, “Textron is an interested potential buyer for cost synergies (both are located in Wichita, Kan.) and potential to upgrade Lear service customers to its bizjets.”

Textron is responsible for making the Cessna business jet, which is in direct competition with Bombardier’s Learjet. Von Rumohr added that Lear has lost market share to the Cessna XLS plus, gaining 33 percent of the market year-to-date versus 60 percent in 2015.

He further mentioned that the Learjet 70/75 is Bombardier’s only product in the segment “with no opportunity for growth”.

Bombardier discarded plans to build a new Learjet 85 last year.