NEW YORK (MarketWatch) -- Bombardier Inc. said Thursday it terminated a $1.5 billion Learjet order from Jet Republic after the provider of fractional-jet ownership declared itself "technically insolvent."
Portugal-based Jet Republic launched last year just as the global recession and credit crisis took hold, pounding the budgets of both companies and wealthy individuals. The company bills itself as a "private jet club," allowing members to fly on its jets for about 6,000 euros an hour.
"It is with great regret that I announce that Jet Republic appears to be technically insolvent," said Chief Executive Jonathan Breeze, in an email to employees posted on an industry website, FractionalLife.com. "The business expected to receive funds today that have not arrived, nor do we expect them to arrive in the immediate future."
In a separate release, Canada's Bombardier (CA:BBD.B 3.96, -0.17, -4.11%) (BDRB.F 3.66, -0.11, -2.81%) said it terminated Jet Republic's order for 110 new Learjet 60 XR jets.
"Bombardier remains committed to the Learjet 60 XR program and production of the aircraft at its Learjet facility in Wichita, Kansas, continues as planned," the company said in a statement.
In June, Breeze appeared on CNBC and said he expects demand for his company's jets to rise over the concern of swine flu and the reduction in commercial airline routes.
He also predicted that top earners in the U.K., eager to escape potentially higher income taxes, would use Jet Republic more often for commuting after establishing new residences abroad.
