Bombardier is projecting stable deliveries of 150 to 155 business jets per year for the foreseeable future, with the mix remaining even between its super-midsize Challengers and ultra-long-range Globals, Jefferies reported following its Bombardier 2024 Global Industrials Conference yesterday.
Bombardier executives attending confirmed that the company is capable of meeting that level and, despite the ramp of shipments in the second half, all of the aircraft to be delivered by year-end are already in Montreal undergoing completions. The company further has a “good line of sight to any material not in the facility today,” despite ongoing supply-chain issues, Jefferies further reported. Bombardier has begun work on aircraft for 2025 deliveries as well.
As for supply chain, the issues have narrowed from broad challenges across almost all suppliers to “certain acute issues that can be managed,” Jefferies reported. “There is out-of-sequence work, but it should return to normal in the next few years.” Further, the analyst pointed to engines and avionics as the remaining sticking points.
The even mix of products comes with the order momentum for the Challenger 3500 and the model's better supply-chain environment. With 200 Global 7500s in the market, Bombardier anticipates delivering the initial Global 8000 follow-ons later next year, transitioning fully to the speedier model in 2026. Jefferies pointed to Bombardier estimates of 35 to 40 Global 8000 deliveries a year.
Pricing has remained at higher levels across its platforms, Bombardier officials informed during the conference. In fact, prices have recently risen given the elevated demand and remain “comfortably ahead of 2019 levels. Used availability, while up to 7% of the fleet, is still well below the typical range of between 10% and 12%.”
Importantly, Bombardier has repaid 45% of its debt and grown earnings from 5% EBITDA to 15%, with more growth anticipated as it makes further inroads with its defense business. Bombardier expects defense to be a major driver of that growth since it has the highest margins of its businesses.
Looking forward, Bombardier does not see a need for a “clean sheet” super-midsize jet at the moment, Jefferies said. Bombardier has remained quiet around its plans for its Challenger 650, which has a decades-long lineage. While the model may be in line for a refresh, the Canadian manufacturer is not looking right now for a complete replacement. New aircraft and engine design technology could change that down the road, but company executives told Jefferies that would be a 10- to 20-year cycle.