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EBACE: New Canadian government deals blow to Diamond D-Jet

Diamond's hopes of relaunching its stalled D-Jet programme have been dashed by the new Canadian government, although the Austrian-owned airframer has vowed to continue the battle to bring the single-engined personal jet to market.

Diamond has been developing the D-Jet, which first flew in 2006, at its London, Ontario factory and had earlier this year appealed to Ottawa for a $35 million loan towards the $90 million it needs to take the programme to certification.

However, Diamond Canada chief executive Peter Maurer revealed on 17 May that industry minister Tony Clement had turned down the request.

Diamond laid off 213 employees in March after running out of cash - the run-up to the 2 May Canadian elections having delayed a government decision. Ontario's provincial government had promised a similar sum contingent on the federal funding on top of $20 million promised by Diamond's founder and main shareholder Christian Dries.

Maurer said he was "disappointed" with the decision, which he said would harm Ontario's aerospace sector by forcing highly skilled staff to leave the industry. But he said efforts to find finance would continue. "While it precludes us from recalling our laid off work force right now, we will of course continue to pursue our ongoing parallel efforts, through other avenues, to secure the necessary funding for completion of the D-Jet."

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