Bombardier’s revenues dipped by 12%, to $1.3 billion, as it handed over two fewer aircraft in the first quarter, the Montreal-headquartered manufacturer reported today. But at the same time it racked up 60% more in orders in the quarter year-over-year, helping to push up backlog by $700 million, to $14.9 billion, and resulting in a book-to-bill of 1.6:1. Additionally, the company's aftermarket revenues grew by 13%, to $477 million, following its upward trend as it has significantly grown its footprint globally.
In all, Bombardier president and CEO Éric Martel cited the “great performance demonstrated by our team” and added that the company “came flying out of the gates in 2024.” The deliveries “follow our plan for the year,” as the company adjusted its shipment profile to meet supply-chain challenges. “Our focus during the first half of the year is to build our inventory to deliver high volumes of aircraft in the second half,” he said.
Further, the company anticipates deliveries to lean more on Challengers this year, with Globals remaining stable before increasing in 2025. Martel added that Bombardier remains on track to meet its guidance of 150 to 155 aircraft for the year. “We continue to stand with a multi-year and well-diversified backlog,” he said. “We have a clear, clear line of sight on the up on the upcoming year and as well as where we need to be for 2025.”
As for first-quarter deliveries, the softened revenues also reflect a change in the mix, with eight ultra-long-range Globals and 12 super-midsize Challengers shipped. This compares with 14 Globals and eight Challengers a year earlier. This shift also took a toll on net profit, which was down almost two-thirds from $302 million a year ago to $110 million in the quarter.
On the services front, the company is on track with its plans to expand its aftermarket revenues into a $2 billion business by 2025, “and it won’t stop there,” Martel said. As the company increased its service center footprint by 1 million sq ft over the past several years, he maintained those facilities are busy, drawing in more of the existing fleet every month. In addition, Bombardier’s Smart Link Plus health monitoring unit also has a “high capture rate,” which Martel said is key to its organic growth in the aftermarket.
Bombardier further is encouraged about the outlook of the market going forward particularly since aircraft utilization continues to increase. “In fact, Bombardier aircraft have recorded a 7% growth in flight hours in March 2024 compared to the same month last year,” he said. “It's a good sign that people have stuck with business aviation post pandemic.”
Activity in the Middle East, Asia, and America remains strong, while Bombardier has seen signs of an uptick in Europe, he said. Last year closed with a strong Challenger 3500 order activity, but this first quarter was “marked by strong activity on the large-cabin side of the business. As anticipated, we are seeing a lot of activity around the Global family, a trend which is expected to continue in 2024.”
Bombardier continues to deleverage its debt load in a “steady and methodical way,” Martel added, ahead of where the company planned with the ability to retire $100 million in debt through the use of excess cash. He also noted margin growth.
He also touched on the next member of the Global family, saying the 8000 remains on track for delivery in the second half of 2025. Meanwhile, its predecessor—the Global 7500, which has been in service for five years—“is performing on all fronts, on the bottom line and in the air. We see a lot of operators using [the aircraft] on long legs very routinely.” The model has already begun to draw repeat customs, Martel noted.
Asked about the new competitor in service, with deliveries just starting for the Gulfstream G700, Martel said, “Of course, we’re always closely monitoring what our competitors are doing, but what I can tell you is we see strong success right now on the Global 7500 and 8000. We've seen clearly a movement towards our platform in the last couple of months.”