Bombardier burns more cash to ramp up business jet production

A VistaJet cabin hostess walks through the interior of a new Bombardier Global 7500 business jet as the company celebrates its 10th delivery of this aircraft to VistaJet in Montreal, Quebec, Canada March 29, 2022. REUTERS/Christinne Muschi/File Photo

(Reuters) -Bombardier reported a higher-than-expected cash burn in the first quarter on Thursday as the Canadian planemaker builds up inventory to support increased production of business jets amid resilient demand for private flying.

Cash burn for the quarter through March rose 57% to $387 million, above analysts’ estimates of $361 million, according to LSEG data.

The Montreal-based company is facing pressure from rival General Dynamics’ Gulfstream, which had its flagship G700 luxury jet certified last month by the U.S. Federal Aviation Administration.

Business jet makers are reporting sustained demand for their aircraft, although industry data shows private flying has been levelling off after years of growth spurred by the pandemic.

Bombardier on Thursday reported 20 aircraft deliveries in the first quarter, which it said will put it on track to handover 150 to 155 jets this year.

Revenue, however, declined 12% in the quarter due to the delivery of less pricier aircraft. But orders for Bombardier’s jets rose 60% in the first quarter, pushing the company’s backlog to $14.9 billion.

Revenue from the company’s services business rose 13% to $477 million.

Total revenue for the first quarter was $1.3 billion, below estimates of $1.5 billion.

Quarterly profit fell to $110 million from $302 million. On a per share basis, adjusted profit was 36 cents per share, above estimates of 28 cents per share.

(Reporting By Allison Lampert in Montreal and Abhijith Ganapavaram and Aatreyee Dasgupta in Bengaluru; Editing by Shounak Dasgupta)