Bombardier Inc. T.BBD.PR.B

Primary Symbol: T.BBD.A Alternate Symbol(s): BDRPF | BDRXF | T.BBD.PR.C | T.BBD.PR.D | BOMBF | BDRAF | T.BBD.B | BDRBF

Industrials Aerospace & Defense

Bombardier Inc. is a Canada-based manufacturer of business aircraft with a global network of service centers. The Company is focused on designing, manufacturing and servicing business jets. The Company has a worldwide fleet of more than 5,000 aircraft in service with a variety of multinational corporations, charter and fractional ownership providers, governments and private individuals. It operates aerostructure, assembly and completion facilities in Canada, the United States and Mexico. Its robust customer support network services the Learjet, Challenger and Global families of aircraft, and includes facilities in strategic locations in the United States and Canada, as well as in the United Kingdom, Germany, France, Switzerland, Austria, the United Arab Emirates, Singapore, China and Australia. The Company's jets include Challenger 350, Challenger 3500, Challenger 650, Global 5500, Global 6500, Global 7500 and Global 8000.

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Bombardier Inc. > A RBC quick take

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Comment by BBDB859on Oct 24, 2024 11:52am

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Post# 36280390

RE:A RBC quick take

Thanks Temp.

This should help in increasing Revs on the Services side in 2025. I'm sure Wheels Up
will certainly use our CPO services side first to renew the newly acquired planes before putting them into service. I understand that Fly Exclusive BJ's as well wants to add 20 used Chellengers to their fleet in the next 2-3 years. These trends are going to help increase the Revs on the Service side going forward to closer to half of the company's Revs.

Tempo1 wrote: Wheels Up adding Challenger aircraft to its fleet - a positive for Services and CPO

Sentiment: Positive

What happened? Last night, Wheels Up announced its plans to acquire a fleet of pre-owned Challenger 300 and 350 aircraft via the secondary market. The Bombardier Challenger 300 Series aircraft are expected to be introduced into Wheels Up's fleet beginning next year, with availability on both an as-requested charter basis and on specified routes for members. A complete introduction into Wheels Up's programmatic offering across guaranteed service areas is expected by the end of 2025. Wheels Up expects to complete the transition to the Challenger platform within approximately three years.

Our view: We view the announcement from Wheels Up that it is transitioning its super mid offering to Challenger 300 Series aircraft to improve operational performance, operational efficiency and enhance customer experience as a positive for Bombardier. We note that Challengers continue to lead the super-midsize category and are a top choice for fleet operators, with this news further cementing that fact, in our view. We see the adoption by Wheels Up as a tailwind for services growth post-2025, given the higher utilization rates of fleet operators. Wheels Up currently has 40 Citation Xs in its fleet, which the company plans to transition according to the release over the next three years, which could also benefit CPO, in our view. BBD remains our top idea under coverage, and we see continued adoption of its aircraft as supporting our long-term estimates surrounding revenue growth and margin improvement, which, when combined, translate to low-teen FCF CAGR out to 2030.