Revenue breakdown showed the manufacturing segment contributed $1.7bn (up $448m YoY) to the total revenue, while the remainder $507m (up $79m YoY) came from services segment.

The company delivered 20 medium and 19 large business aircraft during the 2Q 2024, up from 15 and 14 respectively in the second quarter of 2023. Overall, during the six months, the company has so far delivered 59 business jets (32 medium and 27 large) against a target of 150-155 announced at the start of 2024.

However, despite higher sales and deliveries, at the end of second quarter, the company’s backlog stayed flat at $14.9bn on unit book-to-bill ratio of 1.0x relative to first quarter.

“Revenue and deliveries for the second quarter saw impressive growth. We’re up for more than 30% year-over-year in both of those columns,” said Matti Lehmus, CEO, Bombardier. “We are very clearly outperforming our peers when it comes to consistency and predictability on aircraft deliveries.”

However, Lehmus warned that the ‘supply chain is still a headwind.’ But he said the company is working closely with engine makers to ensure production timelines still are within the targets.

“We’ve delivered impressive double-digit growth in deliveries, revenues, services, and profitability. We’re on track to meeting our full year guidance, and we have strong momentum as we enter the second half of the year,” added Bart Demosky, Bombardier’s chief financial officer.

“Our business is continuing to grow rapidly with Q2 revenues increasing by almost a third versus 2023. Our services revenues crossed above the $500m mark for the first time, and that’s a milestone that we’ve been talking about for the past three years, putting us in the right place to reach our 2025 services revenue objective of $2bn, but doing it one year early.”

Despite better prices and higher sales supporting topline growth, the company’s gross margin shrunk by 190 basis points to 20.2% during the second quarter. In addition, the company’s EBIT margin also declined 590bps to 8.7%.

On the liquidity front, the company has no long-term debt maturing until 2026. However, it does have a large debt repayment of $983m due in 2027.

However, the company said that its current liquidity of $1.3bn is adequate in the short-term. But it added that it will “continue to opportunistically refinance or deploy excess liquidity towards debt pay down.”

Bombardier is targeting 150-155 business jet deliveries while growing revenue by $400-600m to $8.6bn from 2023’s $8bn in 2024.

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The transaction, valued at $326.4m, was announced back in December last year, but the deal could be worth more than US$6bn if all optional 232 Challenger 3500 jets are delivered over time. Deliveries for aircraft included in the firm order are set to begin in the second half of 2025.

“The Challenger 3500 jet continues to impress with its ultimate combination of refined cabin experience, proven reliability and top performance, perfectly aligning with the needs of NetJets’ discerning client base,” said Éric Martel, president and CEO, Bombardier. “We couldn’t be prouder to see the Challenger 3500 business jet join the NetJets’ fleet as we write the next chapter of our long-term collaboration.”

The Challenger aircraft family is well known for its reliability and safety with more than 900 business jets of the Challenger 300 series in service worldwide. The 3500 builds on that track record and boasts a dispatch reliability of more than 99.8%. It also offers a range of 3,400nm and “outstanding” runway performance and steep-approach capabilities.

It is also the first business jet in the super midsize segment to have an Environmental Product Declaration published, documenting the aircraft’s environmental footprint over its lifecycle.

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Revenue from the company’s manufacturing segment rose to $6.3bn in 2023 against $5.3bn in 2022 as it delivered 138 business aircraft in 2023, of which 63 were medium and 75 were large aircrafts. In comparison, Bombardier’s 2022 deliveries stood at 123 (50 medium and 70 large jets).

On the other hand, the company’s aftermarket services revenues grew by $240m to $1.7bn. The growth in aftermarket revenues came following the expansion of its customer service network, including the ramping up and operationalisation of its global service centers.

“Our global aircraft broke many speed records in 2023, but those were not the only records we set last year. Our team came together to deliver the highest revenues and earnings, record aftermarket revenue, and the highest deliveries since we refocused our business in 2021,” said Éric Martel, president and CEO, Bombardier.

The strong topline performance translated into 412% growth in adjusted earnings-per-share at $3.94 from $0.77 year-over-year. The company reported net income from continuing operations and adjusted net income at $490m and $416m respectively.

However, the company’s order backlog decreased from $14.8 in 2022 to $14.2bn at the end of 2023 as the company said it continues to monitor backlog length and production rates to balance with sales activities, market demand and aircraft lead time.

Moreover, cash flows from operating activities for the full year clocked in at $623m with free cash flow of $257m. The company also paid down $0.4bn of debt in 2023.

The company reported a full-year book-to-bill ratio of 1.

Bombardier also announced its 2024 outlook where in it said it is targeting 150-155 business jet deliveries while growing revenue by $400-600m to $8.6bn from 2023’s $8bn.

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“I have to say, that was one heck of a quarter we just had. When I take a step back and look at what we accomplished, our business is firing on all cylinders,” said Bart Demosky, chief finance officier, Bombardier on the earnings call. The company outperformed on all metrics: revenue, cashflow, EBIDTA and business jet deliveries.

The Quebec-based jet manufacturer said the fourth quarter is already well underway. “Overall, we have a good line of sight for the fourth quarter and everything is in place to deliver greater than 56 aircraft with some already behind us,” said CEO Eric Matel. This will take the company’s full-year jet deliveries to 138, with 82 delivered already in first nine months.

Bombardier is set to achieve nearly one-fourth of the global business jet market share if it is successful in delivering 138 jets by the year end.

“It’s a very strong quarter, typically, because we tend to have a lot of deliveries in the fourth quarter. This quarter is even higher than some quarters in the past, and so that’s setting us up very well too,” said Demosky.

This should drive strong cash flow in the fourth quarter at $639m. “Our cash usage over the past nine months, was largely driven by inventory ramp up for, which we expect to see a significant release in the fourth quarter, as we deliver more than 56 aircraft,” he added. 

The company’s backlog also remains strong at $14.7bn in line with the average in past four quarters. This essentially means the company has an orderbook averaging 18-24 months.

‘No slowdown’

High interest rates, rising costs and negative sentiment remain top risks for business jets market. But Martel says he sees no signs of a slowdown in demand including the fleet operators. “We’ve seen no impact whatsoever in terms of fleet operators being able to raise capital. Whether that be through equity, through cash flow generation, or through access to the debt markets, we continue to see very strong fleet activity.”

“In fact, it’s more of a growth story for the fleet operators and we’re very pleased to be partnering with them. No signs of pulling back. In fact … a group … said that they’re deploying more capital into business aviation, because it’s been high performing for them.”

However, Robert Stallard at Vertical Research says: “All the bizjet OEMs have now confirmed that new bizjet demand remained resilient in Q3, even with concerns over the impact of the ‘higher for longer’ interest rate environment.”

“The interesting tussle between negative investor sentiment and bizjet fundamentals has been won by the bizjet OEMs this quarter, but we’d be wary of declaring any victory yet.”

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The service is expected to launch commercially in the fourth quarter of this year, with the completion of the network expansion into Canada set for introduction in 2024.

“Building on our nationwide network in the contiguous US, expanding into Canada will allow our customers to realise enhanced inflight connectivity in more destinations and routes where they fly,” said Sergio Aguirre, president and chief operating officer, Gogo Business Aviation. “We have been planning for this and I know our network deployment and field operations teams are ready to execute.”

Gogo 5G uses the firm’s software based AVANCE platform system, which allows for an easy upgrade path to Gogo 5G and Gogo’s global Low Earth Orbit (LEO) solution in the future. Gogo 5G is expected to deliver 25Mbps on average, with peak speeds in the 75-80 Mbps range.

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TRAQPak’s analysts predicted the fall based on the European market’s dip in December, which was down 15.8% from December 2021. Globally, flight activity slowed in December with a decrease of 5% from December 2021, while monthly activity dropped 1.8% from November 2022.

In Europe, large cabin jets accounted for the biggest drop in activity levels, down 36.6% from December 2021, followed by mid-size jets (down by 11.5%) and small cabin jets (down 1%). The only aircraft type that saw any increase in activity in the period was turbo prop aircraft, with a small growth of 0.6%.

Elsewhere, predictions for this month were more optimistic, with a 2.3% increase in flight activity predicted year-over-year in North America for January 2023. This follows a smaller drop in activity for the region in December, down 6.2% from December 2021. Despite this, overall activity in North America remains up 12.7% from December 2019.

Fractional activity remained relatively consistent in the region, with a 1.3% decrease year-over-year. In terms of activity of aircraft types in North America, all were negative, with mid-size cabin jets performing the worst year-over-year (down by 9.1%). This was followed by large cabin jets, which recorded a 5.7% fall in activity, small cabin jets down by5.5% and turbo props with a decline of 3.7%.

By region within the continent, the largest monthly decline occurred in New England, with a drop in activity of 15.5% from November 2022, representing the region’s fourth month of decline in a row. Activity in the Caribbean increased by 26.2% in the month, while Canada decreased by 3.9%.

Across Africa, Asia, Australia and South America there were just over 60,000 business aviation flights during December, up 9.3% from November. These markets appear to be strengthening as activity was up significantly for the fourth month in a row.

Meanwhile, the fall in European business aviation contrasts with the level achieved last June,  the region’s busiest month on record in June, according to Argus’ TRAQPak report released in last July.  Year-on-year, the market in Europe increased by almost a third between June 2021 and June 2022.   

See the business activity statistics by region below.

Business aviation flights – at a glance:

Business aviation flights across Europe

Business aviation  flights across North America, December 2022 vs December 2021

Business aviation  flights across Africa, Asia, Australia and South America 

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The latest additions to the ASC network will support the company’s BR710 and Tay 611-8/8C engines in North America. Rolls-Royce currently has around 75 ASC sites worldwide.

Skyservice, with facilities in Montreal, Toronto and Calgary will be the first ASC in Canada and will work in tandem with Rolls-Royce’s Canadian MRO.  It will service BR710A1/C4/A2 and Tay 611-8/8C engines.

Supporting the BR710A1/C4 and Tay 611-8/8C engines on the US West Coast, Western Jet Aviation will provide services from Van Nuys, California.

Both facilities plan to be operational in early 2023.

Andy Robinson, senior vice president, Customers and Services – Business Aviation, Rolls-Royce said that with more than 3,700 Rolls-Royce-powered aircraft currently in service, it is important to deliver continued support for its clients.

“Our collaboration with the world’s most experienced maintenance providers ensures industry leading service levels for our growing global CorporateCare customer base,” he said.

Duncan Aviation has also extended its partnership as a service provider within Rolls-Royce’s ASC network. The MRO will maintain Rolls-Royce BR710A1/C4/A2, Tay 611-8/8C and AE at its US sites in Lincoln, Nebraska; Battle Creek, Michigan and Provo, Utah.

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The 153,000sqft facility doubles Skyservice’s footprint at Montreal-Trudeau International Airport (YUL). Its 80,000sqft of hangar space will allow the company greater capacity to perform nose-to-tail heavy aircraft maintenance as well as support the growing demand for aircraft management at one of Canada’s biggest airports.

Benjamin Murray, president and CEO, Skyservice said the facility will allow the company to deliver “award-winning services” to even more clients, owners and operators at YUL. He added that the company is continuing to invest in aviation excellence, innovation and sustainability at the airport, “creating more opportunities for hands-on training and employment and offering owners access to a full suit of best-in-class services and support”.

Skyservice opened Toronto South, its second private jet centre at Toronto Pearson International Airport (YYZ) earlier in the year. The facility includes a 90,000sqft hangar and 20,000sqft FBO exclusive to managed aircraft clients.

In November 2021, the company announced its expansion to four new locations in the US Pacific Northwest, including King County International Airport-Boeing Field in Washington, Redmond Municipal Airport and Ben Municipal Airport in Central Oregon and Helena Regional airport in Montana.

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As chief operations officer of the European Business Aviation Association (EBAA), Baltus was responding to plans from France’s minister delegate for Transport Clément Beaune to ban or restrict the use of private jets in France.

It would be easy to dismiss such plans as bitter fruit – the populist politics of envy. But that would be to dismiss genuine concerns about the use of private jets in Europe and North America. In May restrictions were proposed on private jet arrivals at East Hampton Airport, New York. There was even talk of banning larger private jets. Previously a ban, or punitive taxes, were suggested on private jet landings in Massachusetts.

Canada has gone a step further. The country is adding a 10% tax on the purchases of luxury aircraft, cars and boats from next month.

The motivation behind such suggestions is easy to discover. Take for example, Kylie Jenner’s much-criticised 17-minute, 40-mile flight in the Los Angeles area. Setting aside whether this was a repositioning flight (that would have taken place regardless of its celebrity passenger), such flights focus real concern about the environmental impact of private flights, in particular, and aviation in general.

Baltus’ letter to us opposing the proposed ban represents a master class in marshalling careful and well-considered arguments in favour of private jet aviation. “Bullying the smallest segment of the aviation sector representing 0.04% of the global CO2 emissions because it’s an easy target and the crowd demands a sacrifice won’t solve anything,” he wrote to us. “On the contrary, it will further deteriorate European economies and the lives of the citizens we serve and employ.”

France has a great aviation and technology heritage with great business aviation manufacturers like Dassault, Daher, Airbus and Airbus Helicopters, Baltus wrote. “These companies are developing the sustainable aviation of tomorrow through all types of technological improvements such as SAF, electric aircraft, etc.” Private aviation like the airlines have pledged to achieve carbon neutrality by 2050. Plus in Europe alone aviation generates €87bn ($86.98bn) of economic output in Europe and about 400,000 highly skilled jobs.

Such arguments have already won support from many respondents to CJI’s social media platforms. Charles Pace, director for Civil Aviation at Transport Malta vented the frustration of many respondents. Ian Petts, head of Yachting & Aviation at Equiom Group, spoke for many with the comment: “Great to see our industry mobilising against these vote-buying populist politicians who have not done their homework.”

Meanwhile, perhaps we can find inspiration in Woody Guthrie’s 1940 hit tune Worried Man Blues. “It takes a worried man to sing worried song,” crooned Guthrie.
“I’m worried now but I won’t be worried long.” That might just be true for private jet aviation – if the sector can find a united and compelling voice to answer its many, and increasingly, vocal critics.

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“Since we opened here in 2010, the office has steadily grown in terms of staff, revenue and number of charters. After outstanding growth over the past 18 months, we feel that now is the time to move to larger offices to help us to expand further and hire more local talent to join our specialist team.”

Gary Hopkins, managing director of ACS Canada, (pictured) said: “Since we opened here in 2010, the office has steadily grown in terms of staff, revenue and number of charters. After outstanding growth over the past 18 months, we feel that now is the time to move to larger offices to help us to expand further and hire more local talent to join our specialist team.

“Our new premises are more than twice the size of the old office, which should give us enough room for our ongoing expansion plans. This is a truly exciting time for ACS Canada as we look to build on recent successes.

“Last year saw a huge increase in terms of number of charter contracts, up 25% compared to 2015. This year has started off even better – after the first half of the year, we have seen growth of 36%. These increases are on the back of our ongoing investment in the Canadian charter market, which is helping to accelerate our expansion strategy.”

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