Bombardier eyes higher business jet deliveries, plane production

A Bombardier BD-700 aircraft is pictured above football stadium lights at Sion Airport, Switzerland, September 8, 2019. Picture taken September 8, 2019. REUTERS/Denis Balibouse/File Photo

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Feb 10 (Reuters) – Canadian business jet maker Bombardier said on Thursday it would increase production of its strongest-selling aircraft and forecast higher deliveries, after reporting an adjusted quarterly profit.

Business jet makers are ramping up production of corporate aircraft on higher demand from wealthy travelers opting to fly private during the pandemic, but broader industry supply-chain hiccups, labor shortages and recent surges in COVID-19 cases remain challenges. read more

Montreal-based Bombardier said this year it expects customers to take more jets than the 120 corporate planes it delivered in 2021, and would raise production of medium and large aircraft, with a focus on its popular Challenger line.

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“Looking ahead, we are positioning ourselves to increase the number of deliveries by another 15-20% as soon as 2023, while maintaining a sharp focus on balancing longer-term production increases with the pricing environment,” said Bombardier Chief Executive Eric Martel in a statement.

Martel later told analysts that Bombardier remains in “a fairly good place” on supply chain, while acknowledging manufacturing’s broader struggles globally with parts and labor shortages.

In 2021, Bombardier generated cash flow of $100 million from continuing operations, a metric watched closely by investors.

It expects free cash flow to be greater than $50 million in 2022, a forecast Desjardins analyst Benoit Poirier describes in a note to clients as “very conservative.”

Business jet revenues are forecast to rise to more than $6.5 billion in 2022, compared with $6 billion in 2021, as higher-priced corporate planes account for a larger part of deliveries.

Separately, the company said it would host a virtual investor day on Feb. 24.

Bombardier reported an adjusted quarterly profit of 3 cents per share, helped by higher aircraft margins and cost reduction efforts. Analysts were expecting a loss of 3 cents per share according to data from Refinitiv.

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Reporting by Aishwarya Nair in Bengaluru and Allison Lampert; Editing by Amy Caren Daniel and Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

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