Business jet orders continue to outpace deliveries: Bombardier CEO


Higher utilization rates and shrinking used-aircraft inventories have propelled demand for luxury jets to record levels.

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Jet orders at Bombardier Inc. are growing faster than deliveries — and the trend shows no sign of slowing down as the COVID-19 pandemic heads toward its second anniversary.

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Higher utilization rates and shrinking used-aircraft inventories have propelled demand for luxury jets to record levels. Last month was “comfortably” the busiest November ever for business jet activity globally, according to data compiled by the German market-intelligence firm WINGX . Through 11 months of 2021, global business jet activity is up by six per cent compared to 2019, WINGX said.

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“Since the start of the year, we’ve been selling more planes than we’re delivering, and this trend is continuing as I speak,” chief executive officer Éric Martel said Thursday. “It’s been an extraordinary year. Our strategy was to replenish the order book this year, and we’re ahead of where we wanted to be.”

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Martel spoke to reporters in Dorval after Columbus, Ohio-based NetJets, the world’s largest private jet fleet operator, took delivery of its first Bombardier Global 7500 aircraft at a ceremony. The event also marked the 1,000 th delivery of a large-cabin Global aircraft since Bombardier created the business-jet family almost 30 years ago.

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With a list price of US$75 million, the Global 7500 is the industry’s largest and farthest-flying business jet. Its 14,260-kilometre range allows it to fly nonstop from New York to Beijing or San Francisco to Sydney. It will become the flagship aircraft at NetJets, which is controlled by U.S. billionaire Warren Buffett’s Berkshire Hathaway.

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COVID-19 has pushed wealthy individuals and executives to fly private in droves. Customer demand at NetJets, which sells fractional ownership in the aircraft it operates, is “the best that it’s ever been,” said Patrick Gallagher, the company’s head of sales and marketing.

“People have turned to business jets because they’re safe, but there’s also the question of flexibility,” Martel said. “Many commercial flights are no longer operating today. Yes, a private jet is more expensive, but perhaps not that much. We have a lot of customers who used to fly commercially and are signing up with operators like NetJets.”

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The shift toward private jets “is something that perhaps should have unfolded over 10 or 15 years, and it’s clear that the pandemic accelerated this trend,” Martel added. “We think the vast majority of people who have adopted private planes will stay there.”

NetJets’ first Global 7500, which is part of a 20-aircraft order , has been fully booked by customers for “well over a year,” Gallagher said. The company will take delivery of three more Global 7500s next year, all of which are also fully booked, and about three to five jets annually after 2022, he said.

Bombardier is still considering whether to increase production rates to meet the rising demand, Martel said. A decision, which will be based in part on supplier readiness, will probably be announced in February, he said.

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“We look at what Boeing and Airbus are doing,” the CEO said. “We all share the same suppliers. When we make a decision to boost production, we have to do a review of all of that.”

Business jet makers will deliver just under 700 new aircraft in 2021, 11 per cent more than last year’s COVID-reduced levels, U.S.-based research firm JetNet IQ said Thursday in a report . For 2022, JetNet IQ forecasts a further 12 per cent jump in deliveries, to about 770 units.

Bombardier will probably account for 33 per cent of all business jet revenue globally in 2021, second only to Gulfstream’s 34 per cent, JetNet IQ said. Bombardier will also rank No. 2 in terms of jets delivered, with an 18-per-cent market share, JetNet IQ said.

ftomesco@postmedia.com

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