Company victim of aviation slump

By Paul McKillion
BBC News

The news that Bombardier is making almost 1,000 people redundant, as part of a global plan to cut 3,000 jobs, reflects the severe difficulties being experienced in the business jet market and the wider problems in the airline industry.

Demand for business jets had "deteriorated rapidly", said the company.

One of the problems facing Bombardier was outlined by Michael Ryan, its chief executive in Northern Ireland, at a business function in Belfast.

It was sparked when executives from the US car industry flew to Washington in private jets to ask for huge taxpayer bailouts, but instead received a high-profile telling off from congressmen.

According to a blog written by Máirtín Ó Muilleoir, of the Belfast Media Group, Mr Ryan "lamented the fact that three individuals from an American business which 'exports virtually nothing' and is 'almost entirely unreconstructed' could effectively destroy the small jet business."

Mr Ó Muilleoir continued: "He was talking of course about the CEOs of Detroit motor companies who travelled to (Washington) DC to give evidence to a congressional committee in three separate corporate jets.

"Since that happened, not only has the Obama presidency ruled out the use of bailout monies for corporate jets but it has sent a shudder through corporate America and made almost everyone drop their jet-buying plans."

'Long, hard summer'

Two of the largest makers of general-aviation aircraft in the US, Cessna, and Hawker Beechcraft - have launched advertising campaigns to tell business executives to ignore criticism and keep buying planes.

However, two companies have dropped plans to buy jets.

In the US, Citigroup cancelled a $50m executive jet and in the UK, Royal Bank of Scotland scrapped a new corporate jet.

The aviation website planetalking.com said figures for 2008 showed it was the worse year for cutbacks in the aerospace industry since 2001.

It quoted Chris Seymour of consultancy Ascend, that more than 11% of the global aircraft fleet of 20,293 is now in storage.

"The aviation fleet data shows that at least 400 more aircraft are scheduled to be cut during 2009, with groundings being announced almost daily," he said.

Meanwhile aviation expert Jim Ferguson predicted a "long, hard summer" for the industry as airline routes are cutback and airlines themselves go out of business.

"I got into trouble for saying that we would lose 30-40 airlines. A couple of weeks later Willie Walsh, the head of BA, said we're going to lose about 30 airlines by Christmas and he was right, so it's a very, very serious situation indeed.

"I can see further cut backs in routes. New summer timetables started around the world last weekend and there's a lot not happening that usually happens.

"Equally, a lot of routes are being thinned down and that is going to continue. If people don't use the routes, they're going to lose them."