While Bombardier’s first-quarter deliveries remained flat year-over-year at 26 business jets, a shift in mix to far more of its large, ultra-long-range models, including eight Global 7500s, helped lead to an 18 percent increase in business jet revenues, the company reported Thursday morning. Release of these quarterly results marked the company's first earnings report as a pure-play business aviation organization.
Bombardier delivered 16 Globals in the quarter, compared with nine a year earlier. This year’s first-quarter deliveries included two more Global 7500s. Meanwhile, Challenger deliveries fell from 14 in the first quarter of 2020 to nine in the most recent quarter, while Learjet deliveries dropped year-over-year from three to one as Bombardier moves to end production of that product line by year-end.
Encouraging to the manufacturer is that EBITDA from continuing operations jumped 43 percent year-over-year, to $123 million, not only from a deliveries mix tilted more heavily toward its top-of-the-line Globals but continued cost savings gleaned from Global 7500 production. Also helping with margins were cost structure improvements in divestitures.
Bombardier president and CEO Éric Martel said the company remains on target to obtain a 20 percent cost savings on the Global 7500 production program from the 50th aircraft to 100th aircraft. He added that the company has a “clear line of sight” on those savings given some components, including the 100th wing shipset, have been completed.
“In our first quarter as a pure-play business aviation company, Bombardier delivered solid financial performance,” Martel said. “This includes growth in business jet revenues, margin expansion, and significantly improved cash performance.”
Martel further was encouraged by improving order activity with the company achieving a book-to-bill ratio exceeding 1:1 in the quarter. However, he noted that the company needs to rebuild backlog, which fell from $13.6 billion in first-quarter 2020 to $10.4 billion at the end of this March. While ramp-up of Global 7500 deliveries plays into that decline, the pandemic also has taken a toll. Martel noted that order activity started slowly in January but picked up notably in February and March, and that momentum has carried into the second quarter.
Bombardier has continued to chip away at the lengthy Global 7500 backlog, which Martel is now approaching the company’s goal of 18 to 24 months, a time he believed will help attract further orders.