How Bombardier is cashing in on business elite's love affair with private jet travel

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Bombardier Inc,Montreal,Transportation

Commercial planes, trains and snowmobiles are out at Bombardier, as its debt-laden past pushes the company go all-in on the business jet.

Companies in the S&P 500 spent $65 million for bigwigs to use private jets for personal travel in 2022, up about 50% from pre-pandemic levels, with approximately 45% of the largest corporations CEOs receiving aircraft perks, according to Equilar.

By 2018, the financial and operational headwinds became too strong, forcing Bombardier's then-CEO Alain Bellemare to begin shedding key assets, most prominently by selling Airbus the C Series program — rebranded as the popular A220 airline. That was followed by divesting the rest of its commercial aircraft businesses, the Learjet brand of private planes and the railway unit.

Of course, when the entire aviation industry was disrupted — and when commercial airlines started flying again later that year with mandated health restrictions, flight delays and airport chaos — individuals and companies that could afford to buy, lease, rent, or share business jets did, and demand soared. The post-Covid peak numbers are expected to moderate, but the growth continue over the longer-term.

Adjusted EBITDA rose 32% from 2022 to $1.23 billion, while cash flow generation from continuing operations reached $257 million, beating the company's 2023 guidance. "All of that cash has gone to debt retirement, which went from $10.1 billion in 2020, down to $5.5 billion last year," Demosky said.

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How Bombardier is cashing in on business elite's love affair with private jet travelCommercial planes, trains and snowmobiles are out at Bombardier, as its debt-laden past pushes the company go all-in on the business jet.
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