Bombardier seizes on soaring demand for private jets

Bombardier bolstered its business jet backlog in its Q1, ramping up cash flow as more wealthy high-fliers opt for private plane travel in the COVID-19 era. The company increased its backlog of private jet orders by US$1.3b or 11% to US$13.5b, with a book-to-bill ratio -- the ratio of orders received to units shipped and billed -- of 2.5. The bookings uptick left Bombardier with free cash flow of US$173m, far above analyst expectations of a more than US$200m loss, though the company did still report an overall net loss. While airlines struggled amid the COVID-19 pandemic, use of business jets rose by 23% in the United States and 53% in Europe last quarter compared with a year earlier, according to the FAA and Eurocontrol. Those leaps build on large increases in 2021. Flight cancellations, wariness of exposure to the virus and surging wealth among the ultra-rich -- the world's 2,755 billionaires saw their combined wealth rise by US$5t since March 2021, according to a January report from Oxfam International -- have helped drive demand for private aircraft. The taste for luxury has seen buyers snap up used business jets as well, leaving the total number for sale at 3.1% of the worldwide fleet as of late February, its lowest level in more than 25 years, according to market data firm Jetnet IQ -- and making new products a likelier option. Meanwhile airlines captured just 80% of premium travel last year, down from 90% before the pandemic, according to Alton Aviation Consultancy managing director Umang Gupta. The horrific war in Ukraine following Russia's invasion poses some challenges for Bombardier, said CEO Eric Martel. Russian customers account for roughly 5% of Bombardier backlog, according to estimates from J.P. Morgan analyst Seth Seifman. The company has cancelled orders due to Russian sanctions, but views the situation as manageable.<br/>