Shareholders of Bombardier (OTC:BDRBF) were hit hard last week by an update from company management. Not only did the manufacturer lower its near-term forecast estimates, but it also suspended work on the new Learjet 85.

With shares down 26% after the announcement, it's worth looking at what has changed at Bombardier and whether aerospace rivals Boeing (NYSE:BA) and Airbus (OTC:EADSY) are affected.

The announcement
The biggest piece of news to come from Bombardier, on Jan. 15, was that the manufacturer will stop work on the Learjet 85 and lay off 1,000 workers. With the Learjet 85 being seen as Bombardier's next technological leap in the business jet sector, the delay in its release is certainly a negative for the company as a whole.

In the same announcement, Bombardier also slashed its aerospace division cash flow guidance from the previous range of $1.2 billion-$1.6 billion down to $800 million. At the same time, the company also lowered profit margin estimates for both the aerospace and train divisions.

C Series effects
Besides the Learjet 85, Bombardier has another major aircraft project in the works right now. For several years, the company has been working on the C Series, which is designed to compete with the Boeing 737 and Airbus A320 in the mid-100-seat-capacity commercial aircraft market.

Bombardier C Series. Source: Bombardier.

Although the C Series wasn't the primary focus of the company's recent update, the suspension of the Learjet 85 work shows Bombardier is trying to conserve resources and has chosen the C Series as the more important project.

Bombardier has noted that the Learjet 85 isn't canceled, signaling that it intends to eventually produce both the Learjet 85 and the C Series. However, the fact that the company declined to give a restart date for the Learjet 85 probably means we won't be seeing the jet in the skies anytime soon.

Capital issues?
In the past, some analysts have speculated that Bombardier may need to raise additional capital to maintain a margin of safety while bringing its aircraft to production. With the announcement last week, the likelihood of a capital raise has increased because of the reduced profit margin and cash-flow guidance.

At this point, I wouldn't be surprised to see the company raise capital to provide a margin of safety. As analysts have noted in the past, this could come from debt, equity, or a combination of both. For the company's part, Bloomberg notes that Bombardier CFO Pierre Alary says it will be "opportunistic" when it comes to maintaining healthy levels of liquidity.

Still, holding $3.8 billion in short-term capital resources at the end of last year, Bombardier isn't teetering on the edge of collapse. But the current liquidity situation makes a debt or equity issuance more likely.

Effects on other plane makers
With Bombardier's biggest project being one that goes after the markets held by Boeing and Airbus, it's worth considering whether the Bombardier announcement changes the situation at other aerospace manufacturers.

From a liquidity perspective, capital issues are mostly confined to Bombardier because of delays in projects that are consuming large amounts of capital. In contrast to Bombardier, Boeing and Airbus are dealing with record orders and have far greater capital resources at play to continue making investments in new projects.

On the competition front, the lack of changes for the C Series in the announcement means that competition between the aircraft and the Boeing 737 and Airbus A320 remains largely as it was before the announcement. The C Series is still on track to be released, and whether Bombardier raises more capital in the process is unlikely to affect how the aircraft stacks up against the offerings from Boeing and Airbus.

The bottom line
Bombardier's announcement is certainly a disappointment for shareholders, but the company still has the option to raise capital if management feels a need to do so. Despite the sharp drop in Bombardier shares, Boeing and Airbus shouldn't expect to see big changes from the announcement.

While Bombardier may turn toward the capital markets for additional funds, Boeing and Airbus are in strong financial positions and continue to represent aerospace manufacturers with a lower risk profile.