With customers walking away from their business jets only weeks away from completion, inventories of used jets at record levels, and business-jet use as low as it's ever been, the cuts Bombardier Inc. (BBD.B.T) announced Thursday may still not be enough.

The Montreal company said Thursday that it would reduce its business-jet production by 25% and cull another 3,000 jobs this year, only weeks after guiding for a 10% production cut and 1,400 job losses.

The news came as little surprise to most observers. More than any other aircraft type, business-jet sales are closely aligned to corporate profits and economic growth - both of which fell off a cliff in the fourth quarter. Financing is also harder, even in good times, more so during a period of tight credit. And the public image of business jets has taken a real beating recently.

In fact, many analysts said they'd already factored deep production cuts into their models as the business-jet outlook continued to dim. As well, Bombardier's shares, which until Thursday had fallen 32% since the start of the year, had already discounted the move.

"This new guidance is precisely in-line with our existing forecast and a more realistic target, in our opinion," said Cameron Doerksen, analyst at Versant Partners.

As well, Bombardier's latest cuts now put it more in line with its competitors. Brazil's Embraer S.A. (ERJ), Textron Inc.'s (TXT) Cessna and General Dynamics Corp. (GD) unit Gulfstream had already slashed their production rates by up to 50% on some models.

Still, some believe it's not enough. Joe Nadol at JP Morgan suggested "there could be further downward revisions to come" while Bernard Poirier of Desjardins Securities said "further production cuts remain a possibility if the market continues to worsen."

In its monthly survey on the business-jet market, UBS says many observers believe an overall production cut of 40-50% by all manufacturers may be needed because of the huge inventory of almost-new used aircraft available for sale.

While no one can predict if the market will worsen, it doesn't appear to be getting better.

Wayne Plucker, senior aerospace analyst at Frost & Sullivan, who focuses on the business-jet industry, says he used to receive a handful of notices every day offering a used business jet for sale. Now, he says, he gets "dozens and dozens."

Although he believes the market may soon be reaching a bottom following its precipitous plunge in the past six months, he doesn't see any signs of an uptick. A long and deep trough is most likely, he says. "For the manufacturer marketplace, it's kind of a perfect storm right now...and we're going to be in it for a while," he says.

Bombardier announced Thursday it delivered only 54 business jets in the quarter, down from 76 a year earlier. And rather than book new orders in the quarter, the flurry of cancellations and deferrals took its order book down by 19 "tails" or aircraft.

Even more worrisome, Bombardier's pre-owned aircraft inventory rose to 29 units from 27 in the quarter. National Bank Financial analyst David Newman said given current market conditions "the aircraft may remain on Bombardier's balance sheet for some time, lest they be sold at lower prices."

Newman said the company now shows 19 new aircraft on its books and total inventory of finished products of $1.477 billion, up from $176 million at the end of the third quarter, and $865 million at the end of fiscal 2008.

Guy Hachey, president of Bombardier's aerospace unit, said Thursday the company continues to monitor the market and if more action needs to be taken, "decisive action" will be taken.

Company Web Site: http://www.bombardier.com

-Monica Gutschi, Dow Jones Newswires; 416-306-2017; monica.gutschi@dowjones.com