Bombardier delivered one more business jet in the first quarter than a year earlier for a total of 22. Revenues, however, jumped 17 percent to $1.5 billion, reflecting a mix skewing to larger aircraft following the discontinuation of the Learjet line last year, the Montreal-based OEM reported today. Excluding Learjet, deliveries were up by 22 percent.
Deliveries in the first three months comprised eight Challengers and 14 Globals, compared with six of the super-midsized aircraft and 12 of the ultra-long-range models in the same period last year. Bombardier also delivered three Learjets in the first quarter of 2022.
Bombardier affirmed that it remains on track to continue to ramp up to deliveries topping 138 for the year. Even with the ramp-up, Bombardier maintained a book-to-bill of 0.9:1, just under the even orders-to-deliveries target it had set for the year. Backlog at the end of the quarter stood at $14.8 billion, similar to where it was at the end of the year and representing at least two years of production.
Bombardier president and CEO Éric Martel reiterated that this is a “quality” backlog and that “we feel pretty good our backlog will sustain even if there is a recession.” This is a “different environment than we’ve had before” when the backlog may have had speculators that would be affected by the economic cycles. Bombardier CFO and executive v-p Bart Demosky, noted the regular progress payments required for aircraft orders, resulting in “much less variability.”
“Demand is right where we want it to be,” Martel added of the order activity, noting that North American business is stable, Europe has softened slightly, but the Asia-Pacific region is “showing very positive signs.” He added that customers stress “they still need to move around” and that message was emphasized in Asia-Pacific.
While conceding that Bombardier has faced the same supplier challenges as others in the industry—“[this is] the third year in a row where it’s been challenging"—Martel said the company has maintained as deeply involved in working with the supply chain as it has ever done, down to Tier 3. Demosky added that the company has a line on the parts necessary to meet its delivery targets this year.
The results came despite the regional banking failures, although Martel said Bombardier did feel the effects of them for about two to three weeks. He added that “unfortunately,” those two to three weeks came at the end of the first quarter when activity typically has ramped up, but added that activity normalized after those weeks.
Encouraging to the company, its aftermarket remains on the trajectory it had hoped, contributing $424 million, a 17 percent increase and a new high for the company that has invested heavily in services over the past decade.
Also encouraging to the company is the turnaround in profitability, reporting an adjusted net income of $113 million in the first quarter, compared with a $69 million loss in the same period of 2022.
“This is the best first-quarter net income Bombardier has had in more than five years and the first time it's been positive since 2018,” said Demosky.
