Bombardier, a Canadian planemaker, reported a higher first-quarter cash burn as it increases inventory to support the production of business jets due to strong demand for private flying. In the quarter through March, cash burn was $387 million, up from $247 million the previous year. The company based in Montreal is facing competition from Gulfstream, a division of General Dynamics, which recently had its G700 luxury jet certified by the U.S. Federal Aviation Administration.
Despite private flying leveling off after growth during the pandemic, business jet makers are still experiencing sustained demand for their aircraft. Bombardier delivered 20 aircraft in the first quarter and expects to deliver 150 to 155 jets this year. Revenue declined by 12% to $1.3 billion due to delivering less expensive aircraft, but the company’s backlog increased to $14.9 billion with a 60% rise in orders for jets during the quarter.
Revenue from Bombardier’s services business also increased by 13% to $477 million. However, quarterly profit decreased to $110 million from $302 million. Adjusted profit per share was 36 cents, down from $1.06 the previous year. Despite these challenges, Bombardier is working to meet demand for business jets and strengthen its position in the market.