Despite a fourth-quarter that saw fewer aircraft deliveries year-over-year, Bombardier beat guidance last year with revenues and earnings up 7 percent and 220 percent, respectively, as business jet shipments totaled 120, the company reported this morning. Further, the Montreal-based manufacturer is making plans to ramp up deliveries “a tiny bit” this year and by as much as 15 to 20 percent in 2023.

In a call with analysts, Bombardier president and CEO Eric Martel called 2021 a year of “planning, execution, and prudence” as the company moved forward as a pure-play business jet manufacturer. He also expressed encouragement that the company succeeded in all of its goals: turning the Global 7500 into a revenue “accelerator,” expanding its aftermarket presence with $1.2 billion in revenue, deleveraging its balance sheet with interest expenses cut by $250 million, and remaining on target with its cost-reduction goal of $400 million by 2023.

In the quarter, Bombardier delivered 38 business jets, down from 44 a year ago, with large aircraft deliveries sliding by 10 units, to 18. Meanwhile, Learjet deliveries were cut in half to two units as the company winds down its light jet programs. Martel reiterated that the final three Learjets are to be handed over this year.

As a result, fourth-quarter 2021 business jet revenues dropped by $500 million, to $1.7 billion. But adjusted earnings swelled from a $1 million loss in fourth-quarter 2020 to a $232 million gain in the most recent quarter.

Martel explained that in the fourth quarter the results were a little unusual because the onset of the pandemic—and the associated travel restrictions and factory stoppages—had caused a shift in deliveries toward the end of 2020, thus making for a really strong final quarter that year. “2020 was a little strange because of the pandemic,” he said and was encouraged that 2021 resulted in much better distribution and sequencing throughout the year.

For the year, business jet deliveries eclipsed 2020 totals by six. Global deliveries totaled 66, marking a seven-unit improvement; the flagship Global 7500, which Bombardier executives now see as a profitable program, accounted for 39 of those deliveries. Challenger deliveries remained flat at 44 in each of the past two years, while Learjet deliveries were down one, to 10, in 2021.

This resulted in $6 billion in business jet revenues last year, besting guidance that Bombardier had already revised up in August of $5.8 billion. Earnings, meanwhile, soared to $640 million, compared with revised guidance of $575 million and 2020 earnings of $200 million.

In addition to the increased profitability of the Global 7500 and the more favorable mix of deliveries overall, revenues and earnings were boosted by Bombardier’s campaign to balance its revenue stream with more aftermarket sales. Revenues from aftermarket were up 25 percent from the year before as flying picked up and Bombardier made strides in increasing service capacity.

This is expected to make another jump forward this year as the company moves to open new and expanded facilities in Singapore, Australia, the UK, and the U.S. Bombardier has a goal of increasing aftermarket contribution from 18 percent in 2018 to 27 percent in 2025.

As for the future, Martel noted the strong 1.53:1 book-to-bill increased backlog by $1.5 billion last year, to $12.2 billion. While he said Bombardier was seeing continued strong sales into the first quarter of this year, the company was remaining conservative in its outlook given potential uncertainties around world conflicts, supply chain, and the pandemic. Thus, it is projecting a book-to-bill of about 1.1:1 this year.

Even so, he noted that this year’s production is largely sold out and 2023 slots are filling up. Revenues are expected to top $6.5 billion in 2022, with earnings projected to improve another 29 percent, to $825 million. The company believes more aftermarket services, coupled with the improved profitability of the Global 7500, will help on both accounts.

Regarding production this year, Martel said delivery gains will come with the Challengers, noting that increases in production of Globals require more lead time. That is why Bombardier anticipates a bigger boost in output in 2023 versus 2022.

He stressed that in planning its production increases, Bombardier was weighing backlog, pricing, and supply chain. While maintaining that all three are equally important, Martel noted that the supply chain continues to present challenges necessitating a cautious approach to ramp up.

However, 2021 was marked with some milestones for the Canadian company including the unveiling of the Challenger 3500, which Martel said has been generating strong sales, as well as the handing over of the 1,000th Global. 

The Global 7500 program, meanwhile, is nearing its 100th delivery this year as the company overall celebrates its 80th anniversary.