Bombardier Business-Jet Deliveries Outpace Industry
Bombardier Inc. (BBD/B) business-jet deliveries climbed 21 percent last year, outperforming a global industry in which total shipments declined, a U.S. trade group said.
Bombardier’s accompanying 20 percent gain in billings helped fuel an increase of less than 1 percent across manufacturers for all light aircraft, including piston-engine and turboprop planes, the General Aviation Manufacturers Association said today.
Industry billings climbed 0.4 percent to $19.1 billion, the Washington-based group said. Billings at Montreal-based Bombardier, the world’s largest maker of business jets by sales, rose to $5.9 billion in 2011 from $4.9 billion a year earlier.
While total light airplane shipments dropped for a third consecutive year, dipping 3.5 percent, “a majority of market fundamentals are moving in the right direction,” Caroline Daniels, chairman of the industry group, said in a statement. Planemakers delivered 1,865 aircraft globally in 2011, down from 1,932 in 2010, the group said.
Declines of 1.5 percent for shipments of piston-engine planes, 2.4 percent for turboprops and 6.3 percent for business jets “indicate general aviation is reaching the trough in this cycle,” Daniels said.
Business-jet sales typically lag growth in corporate earnings, which reached a record $1.97 trillion in the third quarter of 2011, according to the most recent data from the Commerce Department. That’s up 1.7 percent from the previous three months and 7.5 percent higher than the same period in 2010.
Bombardier tapped growing demand for its Learjet, Challenger 605 and Global 5000 models to deliver 182 business jets in 2011, up from 150 a year earlier, trade group data show.
“Investors may become somewhat more optimistic about 2012 business jet delivery forecasts for Bombardier” after seeing the 2011 data, Michael Willemse, an analyst at CIBC World Markets in Toronto, said today in a note to clients. Bombardier may deliver about 160 to 170 business jets this year, said Willemse, who rates the stock “sector outperform.”
Bombardier’s Class B stock rose 1.3 percent to C$4.73 at 4 p.m. in Toronto. The shares have climbed 17 percent this year.
Gulfstream Billings Rise
With billings of $4.9 billion, General Dynamics Corp.’s (GD) Gulfstream aerospace unit ranked second after Bombardier among aircraft makers tracked by the association. That’s a 23 percent increase from 2010 billings of $4 billion.
About half of business-jet deliveries last year took place in the U.S., the association said. Europe accounted for about 20 percent of shipments, compared with 14 percent for the Asia Pacific region and about 10 percent for Latin America. Asia Pacific’s share of global shipments has tripled in the past five years, the association said.
Shipments of large-cabin jets, weighing more than 50,000 pounds (22,700 kilograms), were little changed at 200 last year, the association said. Deliveries of medium-sized jets --weighing 12,500 to 50,000 pounds -- rose 15 percent to 375 units, while light-jet shipments dropped about 46 percent to 106 units.
Light-jet deliveries have plunged 71 percent since 2008, a period in which large-jet shipments increased 4 percent, trade group data show.
“The impact of the economic recession has been felt most acutely at the lighter end of the business-jet spectrum,” Daniels said at a news conference in Washington today.
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