Bombardier Focuses Next 20 Years on Growth in Private Jet Business
Bombardier’s annual report outlines moving sales staff outside of North America to capture flailing commercial jet demand, but remains confident private jet sales will grow from 2013.
Global jet manufacturer Bombardier have come out of the 3 year period of neutral growth with a change in tact for the end of this financial year, choosing to bank on business jet sales as a sure thing while they look away from home for new commercial jet contracts internationally.
In their company annual report the Canadian-headquartered manufacturing group forecasted the “strong, long-term potential” for private jets, predicting 24,000 business jet deliveries by the year ending 2031. In 2012 dollars, Bombardier estimates that business jet sales will amount to a total $648 billion in gross revenues for all private jet segments within which it provides models, identifying the large jet class as the biggest area for sustained customer orders.
Bombardier confidence in the private jet market did come with a cautionary note, insisting that “confidence needs to be restored” for the rest of 2012 in order for the private jet industry to begin a new golden period of sustained growth. It is expected that Bombardier and rivals will exercise caution over anticipating demand, so as to maintain an acceptable level of backlog for the rest of this year.
There was further conservatism in a market segment that is characterized by backlog: commercial airliners. Bombardier sees a 2.3 percent downward revision of its own estimated commercial jet sales over the same 20 year period. The main factor driving this decrease in sales is predicted to be the rising cost of oil. Bombardier’s commercial airliner business will be closely scrutinised from the outside as it prepares to announce customer orders for its 100-seater-plus C-Jet range, at aviation events this coming July. The company used a media presentation this past Tuesday to elaborate on the role emerging economies will play in the sales of commercial and business jets alike for the long-term.
Vice-President of Strategy, Business Development and Structured Finance Mairead Lavery of Bombardier pointed out her company had “made a lot of headway” in emerging markets for putting their business jets on the map, in the media presentation. She personally identified America as the ever-present leader for continental demand for business jets. The company annual report predicted 9,500 aircraft deliveries to North America over the next 20 years, with the European market coming in second at an estimated 3,920 orders. Despite this, Lavery identified European demand as “weak” and felt more confident about the emergence of Asia’s appetite for corporate executive travel.
Bombardier management announced their intention to capitalise on this shift in submarkets by exporting their Montreal sales staff abroad, in an effort to keep “going global”. Although the emphasis of this change was to re-capture ailing commercial jet sales, much will be expected of Bombardier to make good on the promising new era for its revamped Learjet range, starting with the Learjet 70 and Learjet 75 early next year.