A view inside the fuselage of a Bombardier Challenger aircraft under construction is shown at Bombardier's Challenger manufacturing plant in Montreal, Wednesday, April 5, 2023. Bombardier is reporting revenues rose eight per cent year over year in its second quarter amid ongoing demand for business jets as deliveries and aftermarket services ramped up. THE CANADIAN PRESS/Graham Hughes

MONTREAL - Despite supply chain snarls, Bombardier boosted its second-quarter revenues amid ongoing demand for business jets as deliveries and aftermarket services ramped up, said CEO Éric Martel.

“Our team successfully navigated a highly dynamic business environment that saw sustained demand for new and pre-owned jets, as well as steady service growth, all while supply chain pressure persisted,” Martel said in a statement Thursday.

In the quarter ended June 30, the plane maker boosted revenue by eight per cent year over year on the back of 29 jet deliveries and a big leap in income from repairs and parts replacement for some of the 5,000-odd Bombardier planes that ply the skies globally.

The number of shipments allowed Bombardier to maintain a “line of sight” toward reaching its 2023 forecast of at least 138 jet deliveries by the end of the year, Martel told analysts on a conference call.

"I am very comfortable with our more than 138 total delivery targets." But he qualified: "We need to ensure supply chain stability."

No orders have been cancelled, he added.

Nonetheless, Bombardier's share price tumbled more than eight per cent to close at $61.79 on the Toronto Stock Exchange.

The company turned up a net loss of $35 million, due in part to "professional fees" related to the sale of Bombardier’s rail business in January 2021, the company stated.

Still, the Montreal-based outfit increased its backlog by $100 million from the previous quarter to $14.9 billion and touted a book-to-bill — the ratio of orders received to deliveries billed, a key indicator of near-term demand — of 1.1.

“Maintaining that cruising altitude of around one is very encouraging," Martel said. “This reflects the steady demand we expected.”

Some of Bombardier’s $222 million in free cash flow usage from the quarter went toward a major inventory investment to gear up for more deliveries in the second half of the year — at least 87 Challenger and Global jets if the company wants to reach its goal of 138-plus planes. About two-thirds of those 87 are expected in the fourth quarter, said chief financial officer Bart Demosky.

Some cash also flowed toward an assembly line for Bombardier's long-range Globals at a new manufacturing centre on the edge of Toronto’s Pearson airport, slated to open this month.

The 7770,000-square-foot facility marks the culmination of a move 15 kilometres west from its plant at Downsview Airport, where planes have been builtsince 1929 — initially by De Havilland.

Large fleet operators are increasingly sought after, even if full-on ownership of business jets by big corporations and the ultra-wealthy may be slowing, Martel said.

He pointed to the growing array of purchase options, which include charter, "jet card" loyalty-style programs and "fractional ownership."

Charter flights involve hiring a plane and crew for a custom trip. Jet card programs, which function like a premium charter membership, see customers pay in advance for the privilege of a fixed hourly rate and guaranteed availability, with dozens of companies serving North America.

Fractional ownership means buying a share of a plane under a multi-year deal that covers costs like crew wages and maintenance, on top of an hourly rate for time on board.

Flight hours logged by Bombardier-made planes rose 51 per cent last quarter compared to four years earlier, and 14 per cent year over year, Martel said. More hours flown typically means more maintenance and repair services billed by Bombardier.

“We have well-established fleets with the biggest brands,” Martel said, citing companies like Airshare. The Kansas-based company, which sells fractional ownership in its fleet, made a joint announcement with Bombardier last week for an order of up to 20 more Challengers, doubling an initial order from 2021 for the mid-sized jets.

On Thursday, Bombardier reported that revenues increased to $1.68 billion in the three months ended June 30 from $1.56 billion a year earlier.

The plane maker's second-quarter loss of $35 million contrasted with a net loss of $129 million the year before.

On an adjusted basis, earnings hit 72 cents per share, far better than the loss of 48 cents per share from a year earlier and 157 per cent above analyst expectations of 28 cents per share, according to financial markets data firm Refinitiv.

This report by The Canadian Press was first published Aug. 3, 2023.

Companies in this story: (TSX:BBD.B)

News from © The Canadian Press, 2023