Follow @AirwiseNews

Bombardier Revenue Could Double In 5 Years

Bookmark and Share

Bombardier said revenue could nearly double over the next five years, boosted by its new fleet of business and commercial aircraft, and that it planned to put some of the cash into bigger dividend payments.

The Montreal-based aircraft and rail car builder is planning to deliver the first of its new business Learjets this year and its first CSeries commercial aircraft next year.

Bombardier said revenue is expected to grow by more than 30 percent by 2015 and could grow between USD$10 billion and USD$16 billion during the next five-plus years. Revenue dropped about 9 percent in 2012 to USD$16.8 billion.

The expected growth will generate significant cash, chief executive Pierre Beaudoin said at the company's Investor Day in New York. Bombardier's top priorities are to restore its credit rating back to investment grade and to raise its dividend in line with other industrial companies.

Executives said its aerospace division alone could represent USD$8 billion to USD$12 billion of additional revenue a year.

CSERIES UPDATE

Bombardier's new CSeries is expected to make its first test flight by the end of June. It is the company's largest airliner and a USD$3.4 billion challenge to industry leaders Boeing and Airbus for the lucrative 100-149 seat, single-aisle market.

"We believe that we are building a plane for a niche that's going to have substantial, substantial revenue opportunity for quite a bit of time," said Guy Hachey, president and chief operating officer of Bombardier Aerospace.

"We are up against obviously very, very large incumbents that are putting a lot of pressure on us... we're just going to have to slug it out until we establish ourselves."

Bombardier, the world's fourth-largest commercial plane maker, aims to capture 50 percent of the estimated USD$430 billion market for 100-to-149 seat aircraft market over the next 20 years.

The CSeries is undergoing crucial ground-testing this month, Bombardier said.

The company has already secured 14 customers, working toward a goal of 20 customers by mid-2014, when the jet enters service. It has 148 firm orders out of its target of 300, excluding a commitment for 32 CS300 jets by Russia's Ilyushin Finance that is awaiting shareholder approval.

(Reuters)

Airwise adspace