A version of this article appears in the September 1 issue of Aviation Week & Space Technology.

Bombardier has endured a summer that can be characterized as a series of serious cuts. The setbacks and wounds raise difficult questions about the company’s future.

•In late May, an engine failure grounded the CSeries test fleet. It remains grounded. The company has not announced a new certification schedule, but hopes for a 2015 service entry are fading fast. The grounding kept the plane from flying to the Farnborough air show. The CSeries has had minimal sales at every show since 2008. This one was no exception.

•Also in May, Republic Airways, one of only three airlines of any note in the CSeries orderbook, admitted it was reviewing its order, and that its 40 CS300 orders were no longer a priority.

Embraer’s E2 series, a CSeries competitor, continued to bring in scores of orders at Farnborough. Even though it’s five years younger than the CSeries, the E2 orderbook is now larger, and with better quality orders.

•Bombardier’s plans to build Dash 8 Q400 turboprops in Russia began to unravel due to tensions over Ukraine and Western sanctions. The Russian agreement was seen as a way to restore the Q400’s badly deteriorating market situation. The competing ATR turboprop series has outsold the Q400 by a greater than 4-1 ratio over the past five years.

•Bombardier announced it may review priorities for the all-new composite Lear 85 business jet, once expected to enter service in 2013 and rumored to be facing serious technical problems. It may be delayed, to allow Global 7000/8000 deliveries to begin on time. Since the new Global series will not enter service until 2016 and 2017, respectively, the Lear 85 might not see deliveries until later in the decade.

•Also earlier this summer, the company reorganized, eliminating 1,800 jobs, and firing several key executives including Bombardier Aerospace President and Chief Operating Officer Guy Hachey and commercial aircraft marketing head Philippe Poutissou. This latest bloodletting follows the loss of many other key CSeries personnel. Since airline customers like to see stability in an all-new aircraft program (particularly one from a new producer in a segment), the changes appear to be born of desperation rather than strategy.

Some of the company’s travails result from bad luck, or are the inevitable consequences of being a first adopter of new technology. But most of the problems result from the financial obligations associated with the CSeries. Developing a large jet was always a big risk for a medium-size aircraft prime. The CSeries’s inevitable problems and delays are depriving the company’s other aircraft lines of resources needed for product development. They are also damaging the company’s commercial competitiveness across the board.

Bombardier’s litany of horrors this summer augurs worse to come. The company’s debt ratios and balance sheet are considerably weaker than for any other major aerospace company. If there are further delays to the CSeries, Bombardier’s ability to bring the jet to market may be questionable. There is little margin for error, and the company’s refusal to provide a new timetable is concerning.

If there is a silver lining in all of this, it’s the CSeries itself. It offers some impressive new technologies and was the first single-aisle jet to include advanced composite primary structures and Pratt & Whitney’s geared turbofan. It should have been the first next-generation single-aisle to reach the market, which could have been a key advantage. And it still is the best dedicated 110-130-seat jet.

But all network carriers need to operate a large regional jet such as an E2 and a 150-200 seat trunkliner like an Airbus A320neo or Boeing 737 MAX. To incentivize network airlines to operate a third type of single-aisle jet for size optimization, Bombardier needs to be much more commercially aggressive than it has been or—looking at its finances—more commercially aggressive than it can afford to be.

Bombardier’s new organization divides its aerospace division into three units: business aircraft, commercial aircraft, and aerostructures and engineering services. If, as some have theorized, the reorganization is intended to allow Bombardier the option of selling its commercial unit, then there’s the big question of who would be able to buy it and keep the CSeries going. China is the only apparent possibility, but that country has no track record of ever paying for meaningful aviation intellectual property and has had ample opportunity to acquire it in the past.

When Bombardier launched the CSeries, Airbus vowed to crush it. In many ways, the CSeries has been a test of strength for the jetliner duopoly. By reacting with the reengined A320 and 737 series jets, and with help from Embraer, the duopoly has effectively struck back. If Bombardier falters with the CSeries, and if it can’t sell its commercial aerospace unit, the duopoly will have prevailed again. 

Contributing columnist Richard Aboulafia is vice president of analysis at Teal Group. He is based in Washington.