Despite slowdown, Bombardier says business aviation fundamentals solid

NBAA Convention News » 2008
October 1, 2008, 7:17 AM

Given the world economic slowdown and signs that flying by business
operators is down, how concerned are you about a falloff in sales?

Bombardier is obviously following the broader market situation very closely. So far, growth and need are so strong that we’ve had a record first half; the value proposition that business aviation brings has surpassed the economic drag.  
More and more business is being done–this is a worldwide fact. Private jets, charter and fractional ownership allow executives and business influencers to get to their destinations faster and allow them to expand their daily agendas. To put it quite simply, using business jets adds extra productive hours to their days. Time savings are essential to today’s business leaders, so flying from point to point and arriving at an airport that is closer to your final destination is very efficient.

Actually, the overall efficiency for business jets is very high and using them is becoming increasingly affordable. Also, the increase in new programs is making business jets more accessible.

As we’ve talked about in our market forecast, we very much expected a
roll-off of orders but our backlog and the increasing globalization of business aviation shield us from a dip.

What parts of the world are showing the strongest demand for business jets?
The globalization of business aviation over the past five to 10 years has been key to the tremendous growth of our industry. Strong demand in Europe has led the way, fueled by the rise of the euro and growth in wealth, with Russia emerging as a very strong player in business aviation’s overall expansion. Infrastructure expansion throughout Europe including an increase in business aviation airports in the UK, France and Germany have also contributed to our industry’s growth in this region. I should add that the Middle East and South America are also good markets for us.

Do you think demand from parts of the world outside North America will be sustained for the long term?
We think that growth in Europe will remain strong. Markets such as India and China will expand exponentially and will sustain our industry’s growth. Both India and China have very little penetration to date, and when you compare their wealth with business aviation flying there is a lot of potential. For now, the main constraints are their infrastructure. However, as demand keeps growing, these services will come.

Are you seeing a decline in sales this year?
Currently, all segments are strong, particularly the long-range and ultra-long-range segments where we are seeing very strong results. Bombardier has just completed two record years in a row in terms of sales growth. We’ve already recorded 220 firm orders for the first half of this year and the current quarter is showing strong results. Also, our backlogs for Learjet, Challenger and Global aircraft are all at record levels. It’s hard to believe that it can continue at this rate, so as per our forecast we do expect a return to more normal and sustained levels.

Is there any interest at Bombardier in developing a direct competitor to the Gulfstream G650?
Well, I have to say that the Global Express XRS is the ultimate business aircraft, and it is years and miles ahead of its competitors. It features an advanced platform with significant potential for growth, and by the time the new competitive offering enters service, the Global fleet will be some 600 aircraft strong. We’ve already launched the new Global Vision flight deck, which will be the first to feature new [Rockwell Collins] Pro Line Fusion advanced avionics combined with state-of-the-art enhanced-vision and synthetic-vision systems. The Global Express XRS will feature Global Vision in 2011, and of course, there is more to come.

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