Air Capital Insider

Bombardier sets business jets delivery sights lower in ’17

Bombardier’s first Global 7000 test aircraft arrives on Nov. 21 at Wichita Eisenhower National Airport.
Bombardier’s first Global 7000 test aircraft arrives on Nov. 21 at Wichita Eisenhower National Airport. File photo

Bombardier Business Aircraft will deliver 135 business jets and record about $5 billion in revenue in 2017.

That’s according to parent Bombardier Inc., which on Thursday held its annual investor day event with financial analysts.

Next year’s deliveries will be about 15 fewer business jets – and $500 million less in revenue – than the company expects in 2016.

David Coleal, Bombardier Business Aircraft president, told analysts on Thursday that he “feels very confident” with the 2017 delivery number, and “if the market starts to grow, we’re well positioned for that growth.”

Coleal said he’s particularly optimistic about business jet demand between 2018 and 2020, when he says world economies will stabilize and emerging economies will recover. He said that will lead to wealth creation from gross domestic product growth of 3 percent or better, “which clearly facilitates growth.”

That period also will see the entry into service of its newest business jet. The Global 7000 is Bombardier’s biggest-ever business jet, which made its first flight last month and is now at the Bombardier Flight Test Center in Wichita undergoing flight testing.

He said that since the transfer of the plane to Wichita, which landed here on Nov. 21, it has accumulated more than 30 hours of flight time over 10 different flights.

“There is no competitive response to the Global 7/8000,” Coleal said, referring as well to the larger Global 8000, which hasn’t yet been produced. “This is a category-killing aircraft that we’re very excited about.”

The Global 7000 is expected to contribute $3 billion in revenue between 2018 and 2020.

Coleal also said the company will focus on growing its service business, including expansion of its service centers in Fort Lauderdale, Fla., and Tucson, Ariz.

As for Learjet, Bombardier’s light and midsize business jet line produced in Wichita, Coleal said it’s a great product but “just a very tough price point market.”

“So what we do is continue to make sure we’re matching volume with demand requirements and also minimizing the impact of some of the pricing pressures in that segment,” Coleal said. “We’ll continue to monitor Learjet. We’re going to do the right things from a business perspective long-term to make sure we make the right decisions for sustaining the business.”

Coleal was asked by an analyst whether Bombardier would consider reviving the Learjet 85 program that it canceled last year.

“No,” he said. “There’s no plan to bring back the 85.”

Jerry Siebenmark: 316-268-6576, @jsiebenmark