Despite recording a year-on-year delivery slide in 2017, Bombardier is upbeat about its prospects in the business jet sector this year, pointing to higher output than forecast and strong fourth-quarter sales as signs of a market recovery.
Speaking on a fourth-quarter earnings call on 15 February, chief executive Alain Bellemare said: "Overall, the business jet market continues to show signs of improvement."
He attributes the uptick to a shrinking used aircraft inventory – which is now at its "lowest level in a decade" – and “increasingly positive” levels of aircraft utilisation and “market sentiment”.
Order activity climbed in the fourth quarter, Bellemare says, and this trend is continuing in 2018. “I am pretty confident that we've reached the bottom of the barrel."
Bombardier shipped 140 aircraft in the 12 months ended 31 December – 45 Global 6000/5000s, 81 Challenger 650/350s and 14 Learjet 70/75s – against a 2017 delivery guidance of 135 jets. This compares with 163 shipments in 2016 – 51 Globals, 88 Challengers and 24 Learjets.
Output in the fourth quarter totalled 45 aircraft, compared with 54 delivered during the same period in 2016. The company ended the year with a business jet backlog valued at $14 billion, down from $15.4 billion at the end of 2016.
Bombardier
Although the delivery forecast for 2018 remains flat, at 135 aircraft – including the first examples of its ultra-long-range Global 7000 – Bellemare says Bombardier is ready to increase production as demand rises.
The airframer cut output in 2015 in response the declining sales, but has “maintained flexibility” in its system since then, he notes. "The same way that we adjusted our rate very quickly in 2015 when it was time to bring it down, we're ready to take it up if the market can support this," says Bellemare.
Bombardier is confident the arrival this year of Gulfstream’s ultra-widebody G500 and G600 will not affect sales of its competing Global 6000 and 5000. "We have two amazing products that are very well positioned," says Bellemare, pointing to the cabin overhaul that was introduced as standard on the high-end pair last year. "I think that we are in a very good place, and we strongly believe that we'll be able to compete very successfully against the G500 and G600."
Overall business aircraft revenues fell by $780 million in 2017, to just under $5 billion, but Bombardier says it generated double-digit growth from its aftermarket business, fuelled by its recent investment in service network capacity. This includes new maintenance centres in Tianjin, China, and at London Biggin Hill airport in the UK, which opened in April and May 2017, respectively.
Source: Flight International
