A few years ago, manufacturers of business jets were soaring thanks to new-found wealth in emerging markets such as Russia. However, in August 2009, Montreal-based Bombardier Inc. announced that it had terminated an order for 110 business jets, valued at about $1.5 billion.

The Learjet 60XRs were for a European private jet service called Jet Republic, which had grounded its operations. The Jet Republic deal was one of Bombardier’s largest orders ever for corporate jets and could force it to scale back Learjet output and cut staff. “This is an unfortunate business decision and it’s especially unfortunate for the Learjet team; however, we're working closely with them to re-energize sales and move forward,” spokesperson Danielle Boudreau said in an interview.

There is also concern that more cancellations could be on the way. Bombardier, like all aircraft manufacturers, is feeling the effects of a slowdown in orders caused by the recession and the global financial crisis. In addition to companies slashing travel budgets, the industry has also had to cope with corporate jets becoming a symbol of the financial excess that brought down Wall Street. A glut of used business jets on the market is also slowing orders for new aircraft and dragging down prices. According to one aerospace analyst, Bombardier faces a long road to recovery in the business jet market.

What environmental factors contributed to the termination of Bombardier’s business jet order? Comment on the role of environmental uncertainty and resource dependence. What can Bombardier do to reduce environmental uncertainty and resource dependence? What strategic responses should they consider and why?