Bombardier announced Jan. 15 that it is pausing its long-delayed Learjet 85 mid-sized business jet program because of weak market demand for the aircraft and a downward revision in the company’s market forecast.

As a result, Bombardier will reduce its workforce by about 1,000 employees in Wichita and Queretaro, Mexico.

The move reflects continued weakness in the light aircraft category, the company said.

Bombardier President and CEO Pierre Beaudoin said the company will continue to monitor the market.

"When we say ‘pause,’ we mean ‘pause,’" Beaudoin said. The company has ruled out the possibility of terminating the program.

"We think we have a good airplane," Beaudoin said. "It’s already been flying. We think we can complete this aircraft when the market is right."

Most recently, Bombardier debuted the Learjet 75 at the National Business Aviation Association’s annual convention in October. The test aircraft flew as recently as Jan. 9.

The flight test aircraft has made about 70 flights, Beaudoin said. A second test plane was almost ready for transfer into the flight test program. Work on a third test plane had not begun, although some components have been built.

Bombardier has been following the market since it dropped significantly in 2008 during the economic downturn.

The company has been forecasting that the market will pick up. But it does not predict an increase at the kind of rates Bombardier expected.

"We keep saying it’s going to bounce back next year," Beaudoin said. "We’ve been patient for quite a few years."

It is time to take a pause, see how the market behaves, and then bring the Learjet 85 to market when the time is right, he said.

Some aviation forecasters have been predicting an upturn in the market, but the pace is not enough to justify continued investments in the program, Beaudoin said.

As a result, Bombardier will take a pre-tax special charge in the fourth quarter of about $1.4 billion related to the Learjet 85 program, mainly linked to the tooling and development costs of the aircraft, Beaudoin said on a conference call with analysts.

"Bombardier constantly monitors its product strategy and development priorities," Beaudoin said in a statement about the decision. "Given the weakness in the market, we made the difficult decision to pause the Learjet 85 program at this time. We will focus our resources on our two other clean-sheet aircraft programs under development, the CSeries and Global 7000/8000, for which we see tremendous market potential. Both programs are progressing well."

Peter Arment, an aerospace analyst for Sterne Agee, wrote in a note to investors that he sees risk in the development program timeline, primarily for the CSeries.

"Additionally, the weak pricing in business jets will continue to put pressure on the aerospace margins in 2015," Arment wrote.

The layoffs will begin immediately and include 620 employees in Wichita, encompassing engineers, technical workers and those who work on the shop floor, Beaudoin said. In June, the company announced cuts of about 200 jobs related to the Learjet 85 program. After the layoffs, the Wichita site will continue to employ about 1,850 workers.

The Mexico site will employ about 1,800 employees after the layoffs, Beaudoin said.

The Wichita and Queretaro sites remain critical facilities in key markets to Bombardier, the company said.

Wichita’s site also performs final assembly of the Learjet 70 and 75 business jets and operates Bombardier’s Flight Test Center along with a service center.

The Queretaro site contributes to many other Bombardier programs, the company said. It recently completed the Global 7000/8000 aft fuselage manufacturing building.

Bombardier declined to say how many orders it had taken for the Learjet 85.

Flexjet, the former Bombardier-owned fractional ownership company, was its biggest customer with a firm order for 60 Learjet 85s and an option for 65 more.

The move was not a major surprise to analysts and aviation experts.

Some say the change was more a matter of challenges with two other development programs.

"We had expected Bombardier’s decision to shelve the Lear 85 for now due to the program’s struggles and the more important production challenges Bombardier faces for the CSeries and Global 7000/8000," JP Morgan aerospace analyst Joe Nadol wrote in a note to investors.

Bombardier’s decision was not based on a market issue, said Rolland Vincent, an aviation consultant with Rolland Vincent Associates in Plano, Texas.

"It’s an allocation of resources," Vincent said.

He called the CSeries the "biggest bet" the company has ever made. "And they’re not where they want to be right now."

With the three development programs, Bombardier was trying to do too much.

"At the time, it seemed noble. It seemed ambitious," Vincent said. But the company can’t accomplish everything it wants to.

In fact, it is the medium-size business jet segment of the market that is expected grow the most going forward, Vincent said.

Robert Stallard, RBC Capital analyst, said he thought it most relevant that company officials said orders for the Learjet 85 were not coming in long enough in advance of production.

"So this may imply some cash flow problems," Stallard wrote in a note to investors.

Bombardier launched the Learjet 85 program, a clean-sheet composite aircraft and its largest Learjet to date, in 2007. The aircraft fit between the mid-size and super-midsized segment of the market. Deliveries had been expected to begin in 2013.

But delays slid the delivery date to last year, when company officials declined to give an updated schedule for the program.

In the meantime, Bombardier had been giving higher priority to its CSeries and Global 7000/8000 development programs, in which the company has made heavy investments.

Those programs are advancing well, Beaudoin said.

Beaudoin declined to say how long it would take to restart the program once the market returns.

Despite troubles with the Learjet 85, Bombardier exceeded its delivery targets last year with about 290 aircraft deliveries, it said. That includes 204 business and 84 commercial aircraft deliveries, it said. That is a 22% increase compared to 238 deliveries in 2013, including 180 business, 55 commercial and three amphibious aircraft.

The company met its targets for Learjet 70 and 75 deliveries, although the levels are not those before 2008 prior to the economic downturn.

Analyst Nadol said for Bombardier, liquidity is the key issue for its stock.

Cash at Dec. 31 was $2.4 billion and free cash flow missed estimates by about $600 million, he wrote to investors.

Management has noted in the past that it needs about $2 billion to run the business, he said. Bombardier typically burns cash during the first nine months of the year. This year may be less than usual, but "cash still seems likely to move well below the required level unless the company raises fresh capital," Nadol said.