Story ID: 
Bizav Analyst Surveys Merits of Bombardier-Textron Deal
By: Jerry Siebenmark
Caption: Analyst Brian Foley thinks Textron would only be interested in Bombardier's Global business jet line because of overlap with Learjet and Challenger.
Word Count: 297
A Textron acquisition of Bombardier’s business jet unit would “somewhat” alleviate an overcrowded new business jet market but it’s likely Textron would be interested only in the Canadian airframer’s largest product line—the Global series. That’s according to business aviation analyst Brian Foley in a note about the implications of such a deal that was first alluded to in a February 4 Wall Street Journal report.

With a significant slowing of sales of the Learjet 70 and 75, those “models face a very uncertain future, whether under Textron or Bombardier,” Foley said. He also noted that Bombardier’s successful Challenger 350 “sits almost exactly on top of Cessna’s brand-new Citation Longitude,” but it’s been six years since the airplane was introduced. Likewise, the larger and longer-range Challenger 650 is long in the tooth “and has undergone so many upgrades over time with engines, avionics, and other improvements that there’s really nowhere left to go,” he said. “It’s likely that Cessna has a product path for its new Longitude, call it the Longitude+, that could conceivably position itself squarely between the CL350 and CL650, essentially eliminating both models.”

That leaves the Globals, which would fill a hole in the Textron Aviation lineup with the largest and longest-range business jets. While Foley said Textron is the only business jet maker that makes sense as an acquirer of Bombardier’s business jets, such a deal is still tenuous.

“Textron’s financial performance has been stressed lately, and the outlook going forward isn’t looking much better,” Foley said. “It’s more likely that Textron waits it out until Bombardier feels more heat from its debt load, or in a worst-case scenario enters bankruptcy and jettisons much of its debt.”