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.

The post Bombardier 2Q revenue surges 31% on higher aircraft sales appeared first on Corporate Jet Investor.

The company repurchased a total of $788m, consisting of $338m senior notes of 7.125% due in 2026 and $450m of 7.875% due in 2027.

Bombardier had previously issued notices of partial redemption for these notes on May 21, 2024. The redemption process, including the payment and surrender of the notes, is being handled through the Depository Trust Company.

Earlier this month, Bombardier announced the successful closing of its previously announced offering of senior notes raising a total of $750m with these notes maturing in 2032 carrying an interest rate of 7.00% per year.

The company said that it plans to use the proceeds from this offering, along with existing cash reserves, to pay off some of its existing debt including the $338m and $450m in today.

Bombardier has been on a deleveraging drive to improve its balance sheet.

Acknowledging the actions taken by the company, credit ratings agency S&P Global upgraded the Canadian business jet maker Bombardier’s credit rating to ‘B+’ from ‘B’ citing continued progress on reducing debt and a stable business outlook.

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“This most recent upgrade highlights Bombardier’s strength and resiliency, as well the effectiveness of our team’s strategic and disciplined financial management, which has allowed us to steadily meet or exceed the company’s guidance for the past three years,” said Bart Demosky, executive vice president and CFO, Bombardier on the ratings upgrade.

“S&P’s latest upgrade comes on the heels of Moody’s recent upgrade of Bombardier’s credit rating to B1 with a stable outlook. This further demonstrates the company’s strengthened financial profile, which is built on a strong and diversified backlog that continues to provide solid ground for the team to stand on and gives us a clear line of sight on our deliveries for the upcoming years.”

S&P also raised rating on the company’s preferred shares to ‘CCC+’ from ‘CCC’. The upgrade follows a period of strong performance for Bombardier.

The company has been growing its higher-margin aftermarket services business, which helps maintain revenue from existing aircraft. Beyond that, S&P noted that Bombardier’s $14.9bn order backlog provides a foundation for earnings growth in 2025. The company is increasing aircraft deliveries this year (from 138 to 150) and expects to maintain that level in the future.

This growth, along with higher prices and strong aftermarket services, should improve profitability.

Furthermore, the company’s healthy liquidity position, with over $1bn in cash on hand, also contributes to the positive outlook.

“Our upgrade also incorporates the flexibility offered by Bombardier’s sizable cash balance (about $1.2bn on March 31, 2024) that we assume will remain above $1bn over the next few years and that we do not net against debt in our leverage calculation,” S&P said in its rating commentary.

However, S&P said there are some risks to this outlook. Demand from traditional business jet customers (ultra-high net worth individuals and fleet operators) might slow down after 2024 due to a potential economic slowdown and increased competition from new aircraft models.

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The company raised a total of $750m with these notes maturing in 2032.

The notes carry an interest rate of 7.00% per year and were sold at par value.

Bombardier plans to use the proceeds from this offering, along with existing cash reserves, to pay off some of its existing debt. This includes redeeming $338m of their 7.125% senior notes due in 2026 and $450m of their 7.875% senior notes due in 2027.

“As of the date hereof, prior to giving effect to these redemptions, there is $504m aggregate principal amount outstanding of the 2026 notes and $1.4bn aggregate principal amount outstanding of the 2027 motes,” said the company in its statement.

The redemptions are expected to be completed by June 20, 2024.

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The company said the proposed purchase of Bombardier aircraft is valued at approximately $280m based on today’s list price.

“Today’s announcement marks a significant step forward in our fleet expansion plan. Following our successful $25m order with HondaJet, this new $280m order with Bombardier for larger jets would represent a substantial increase in scale,” said Mike Winston, founder and executive chairman, Jet.Ai.

“We anticipate deliveries to commence in 2026, allowing ample time for pre-sales and operational preparation. Despite being a mature cyclical industry, private aviation continues to offer attractive returns on capital investment.”

It is worth mentioning here that Jet.Ai announced its intention to acquire five Bombardier Challenger 3500 super-midsize jets in December 2022 to sell fractional interests.

Non-recourse financing is a specific type of loan where if Jet.AI can’t repay the debt, the lender can’t go after their other assets (like other airplanes they own).

It’s a riskier loan for the lender, so Jet.Ai is likely to have agreed to pay a higher interest rate for the financing.

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Three Gulfstream deals hit the landmark for the company which was founded in 1989 by Joseph Carfgana Sr.

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“We have always prided ourselves as being one of the brokerage firms that’s been around the longest and this number is a testament to that,” Carfagna Jr. told Corporate Jet Investor.

“We realised 1,000 was probably something that was going to happen in the next few years so we made a big deal of it.

“It was exciting to count down as we got very close, but it was just business as usual.”

‘Can’t buy experience’

 The 998^th, 999^th and 1,000th transactions were for Gulfstream G450s for repeat clients.

“In 1994 when I came onboard, we were a very different company – there was no email or internet, so everything moved at a much slower pace, but the principles of what we do are still the same,” added Carfagna Jr, who is based in New Jersey, USA.

“We put a very high importance on making our clients so happy that they’re proud to refer us to their friends.”

Among the 1000 transactions, Leading Edge has completed deals on 242 Gulfstreams, 225 Cessna Citations, 131 Hawkers, 126 Bombardier Challenger and Globals and 121 Dassault Falcons.

“[The secret is] doing things methodically and having good people. You can’t buy experience,” said Carfgana Jr.

Jack Nicklaus

His father began his life in business aviation in 1967 when he joined Bill Lear to sell new airplanes in the north east of the US. One of his first sales was to the golfer Jack Nicklaus. Carfagna Sr. set up Executive Air Fleet (EAF) in 1970 and then Wings Aviation International in 1989, which eventually became Leading Edge Aviation Solutions.

Carfagna Jr. can still remember the first deal he did after joining his father in 1994.

“It was the sale of a Citation 3,” he says. “It was a moment that I won’t forget any time soon. The person we sold it to, we have sold several more airplanes to over the years.”

After all this time in the industry, Carfagna Jr. says he is rarely fazed by anything. “There really isn’t much we haven’t seen – we’ve bought and sold airplanes all over the world, of all different types and as a result when you’ve been around this long not much comes as a surprise,” he says.

‘Needs to be sold’

Of all the deals, though, one particular transaction sticks out. “We were negotiating a deal on the sale of an airplane in September 2008, right after the financial crash, and the parties were arguing over who was to get the china and flatware in the airplane,” he says.

“I advised the client to give them everything they wanted because it was going to be worth a lot less money in a week. I think we saved the client $8m over that. If they had deliberated another few days, it probably would have fallen apart. I just remember thinking, ‘This airplane needs to be sold, the money needs to be wired asap or this deal will never happen.’”

Carfagna Jr. is “fascinated” by the technological advancements in airplanes but after hanging some old sales posters at his offices he notes that manufacturers’ ambitions haven’t changed.

“The vintage ads for airplanes in the 60s and 70s all said the same thing, ‘We will fly you more efficiently, more quietly, at a cheaper cost and faster than our competitors and that’s still what they’re striving to do. They’re just getting better and better at it.”

 For Carfagna Jr., business aviation is in the blood but while he is proud of the legacy it is the future transactions that drive him.

 “Winning the next deal is something that motivates me, all of us, and creating a happy client,” said Carfagna Jr. “Those two things are the primary drivers of what makes me tick and keep doing this.”

The post Leading Edge ‘proud’ of 1,000 aircraft transactions appeared first on Corporate Jet Investor.

“Integrating Starlink technology into our fleet represents a transformative step for OPUL Jets and places us among the leading private jet companies globally,” said Harry Ackerman, group CEO. “Our commitment to providing a superior travel experience aligns perfectly with the capabilities of Starlink, ensuring that our passengers can stay connected to what matters most, wherever they are in the world.”

The Starlink system promises download speeds ranging from 40-220 Mbps and upload speeds of 8-25 Mbps, with latency under 99 milliseconds. This allows passengers to stay connected whether they’re conducting business, watching live events, or just browsing the web. “With this installation, OPUL Jets passengers can enjoy high-speed internet with low-latency and seamless access to streaming, live sports, movies and more during flights,” claims the charter company.

The charter provider’s fleet includes Bombardier mid-size, super mid-size, and ultra-long-range jets operating from bases in London, Dubai, Mumbai, and the Isle of Man. First to receive the Starlink system will be company’s Bombardier Global Express XRS, which has an intercontinental range of 6,500nm. The new Starlink internet service will begin this month aboard an aircraft operated by AV8Jet Charter, Malta.

Installation of the Starlink hardware will be completed during routine maintenance checks to avoid disruption in service. Each aircraft will be fitted with an Aero Terminal (the antenna), a power supply unit, and two wireless access points, all interconnected with minimal, basic wire harnessing. The installation was carried out by ACC Columbia, Germany and supported by Starlink Aviation’s technical team.

Starlink uses a constellation of low Earth orbit (LEO) satellites to deliver stable and high-throughput internet connections.

The post OPUL Jets upgrades fleet with SpaceX’s Starlink Aviation connectivity appeared first on Corporate Jet Investor.

The stock rose from $78.96 at the close on Tuesday to $90.62 by end of trading day on Wednesday – intraday gain of 14.7%.

“Bombardier (BBD.A:CA) has navigated its way through a turbulent turn-around,” according to BofA analyst Ronald Epstein. “Following the peak of post-covid BizJet demand, BizJet aviation activity remains above 2019 levels, which we see as supporting Bombardier’s near-term strategy.”

BofA analysts believe the Canadian aircraft manufacturer is well-positioned for growth due to sustained demand for business jets.

Bombardier’s focus on its existing customer base, aftermarket parts and maintenance sales, and disciplined use of capital creates potential upside for investors, according to Bank of America.

The bank significantly increased its price target on Bombardier to C$120 per share, a substantial jump from their prior target of C$52 per share.

The company also announced that it has priced its offering of $750m aggregate principal amount of new senior notes due June 1, 2032. The notes will carry a coupon of 7.000% per annum and will be sold at par.

The company added, the issuance of the new notes is expected to close on or about June 5.

The post Bombardier hits multi-year high as BofA upgrades stock to ‘Buy’ appeared first on Corporate Jet Investor.

The proceeds from this offering, along with existing cash reserves, will be used for strategic debt management.

Bombardier intends to use the funds to repay or retire a portion of its existing debt, including $240m of 7.125% senior notes due in 2026 and $300m of 7.875% senior notes due in 2027.

This restructuring aims to improve the company’s debt profile and liquidity.

The ratings agency Moody’s assigned a B1 rating to the proposed senior unsecured notes due 2032.

Moody’s kept the company’s B1 corporate family rating (CFR), B1-PD probability of default rating (PDR), SGL-2 speculative grade liquidity rating (SGL), B1 senior unsecured notes rating, and stable outlook unchanged.

Earlier in March this year, the company also raised $750m from a seven-year bond deal which came with 7.287% coupon.

The company’s moves to improve liability management will help if its ratings improve. Moody’s said that the ratings could be upgraded if debt to EBITDA is maintained below 4x and the company continues to generate positive free cash flow.

The company’s debt profile shows $2.8bn maturity due in 2026 and 2027.

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Marmor, a past president of the International Aircraft Dealers Association (IADA), has been involved in aircraft sales for almost 25 years.

“We are privileged to welcome Zipporah to the Opus team,” says Alexandre Lombard, CEO and owner, Opus Aero. “Her extensive experience and proven track record make her an invaluable asset as we embark on our next chapter of growth in North America.”

Marmor started her career at Bombardier in marketing before moving to aircraft sales. She then worked as vice president of sales for NewJet International – then Bombardier’s representative for Monaco, Italy, and Switzerland. She joined ACASS in 2012 rising to vice president of aircraft transactions.

“I am excited to work with Alexandre and the whole Opus team, to expand our footprint in North America,” said Marmor. “Developing our market in the USA and Canada, leveraging Opus’ outstanding reputation and experience, is a natural progression for me.”

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