By Allison Lampert and Aatreyee Dasgupta (Reuters) -Bombardier is weighing higher production of its private jets as orders grow, CEO Eric Martel told analysts on Thursday, after the company reported third-quarter revenue that beat analysts’ estimates. Sustained demand for private flying is swelling business jet makers’ order books, while higher sales of aircraft parts and […]
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Bombardier considers higher jet output after quarterly revenue beats estimates
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By Allison Lampert and Aatreyee Dasgupta
(Reuters) -Bombardier is weighing higher production of its private jets as orders grow, CEO Eric Martel told analysts on Thursday, after the company reported third-quarter revenue that beat analysts’ estimates.
Sustained demand for private flying is swelling business jet makers’ order books, while higher sales of aircraft parts and repair services has led Montreal-based Bombardier to expand aftermarket care service in the U.S. to meet demand.
Martel later told reporters he did not expect trade tensions between Canada and the U.S., the world’s largest market for business jets, to result in tariffs on its aircraft due to extensive U.S. content on Bombardier planes. The company can export its planes south of the border, as they comply with the United States-Mexico-Canada trade agreement.
With Bombardier’s backlog for planes and services hitting a five-year high of $16.6 billion, Martel is assessing whether its suppliers could support higher output.
“As we prepare for the second half of the decade, we are in a position to begin reevaluating some longer-term production rates in areas where our facilities and the supply chain ecosystem could support increases to meet demand,” he said.
While business jet makers have seen supply chain improvements, engines remain a challenge.
Bombardier is also waiting for U.S. and European regulators to approve the company’s $83 million Global 8000 business jet, which was certified by Canada’s transport regulator on Wednesday. Martel told reporters that the prolonged U.S. government shutdown should not lead to delays.
The company delivered 34 aircraft during the third quarter, compared with 30 aircraft in the same period a year ago, and reiterated plans to deliver 150 planes to customers this year.
It posted an11% rise in quarterly revenue to $2.31 billion, beating analysts’ consensus estimate of $2.24 billion, according to data compiled by LSEG.
However, Bombardier missed earnings-per-share expectations on an adjusted basis. The company earned $1.21 per share in the quarter ended September 30, up from 74 cents a share a year earlier. Analysts expected $1.40 per share, according to data compiled by LSEG.
Bombardier shares were down 1% in morning trade.
Martel said he expects business jet sales in Canada to bounce back after the Canadian government scrapped a luxury tax on private aircraft. They were running at about 10 a year before the tax’s introduction in 2022.
“Now that the tax is out we have catch-up to do,” Martel said.
(Reporting by Allison Lampert in Montreal and Aatreyee Dasgupta in Bangalore; Editing by Shailesh Kuber and Paul Simao)