(Reuters) – Bombardier Inc said on Thursday it would generate higher revenue and use less cash in 2021, helped by a rebound in business jet flights and demand for aircraft after the pandemic sapped orders last year, driving up its shares as much as 8%.
Montreal-based Bombardier now expects to hit the top of its previous delivery guidance of 110 to 120 business jets, after beating analysts’ estimates for quarterly revenue on higher deliveries and demand for aftermarket services.
The plane maker said it is close to being sold out on all aircraft in 2021, with Chief Executive Eric Martel expecting orders to pick up for the company’s flagship Global 7500 jet which lists for $73 million “between now and year-end.”
According to FlightAware data, business jet flights were up 23% in the week-beginning July 21 over 2019 levels in the United States, the world’s largest market for corporate aviation.
Separately, Bombardier also disclosed that the Royal Canadian Mounted Police would join a global investigation into suspected bribery related to decade-old sales of company jets to Garuda Indonesia.
Bombardier shares were last up 6% at C$1.59.
Rivals Textron and General Dynamics Corp’s Gulfstream Aerospace are raising production to meet higher demand.
Asked by analysts whether Bombardier was also considering higher production rates, Martel said the company is instead focused on growing its $10.7 billion order backlog.
Free cash flow usage for 2021, a metric closely watched by investors, is now expected to be better than $300 million, compared with previous guidance of $500 million.
Full-year revenue is expected to exceed $5.8 billion, up from more than $5.6 billion.
Business jet revenue for the three months ending June 30 jumped 50% to $1.5 billion, compared with the $1.3 billion that analysts were expecting, according to Refinitiv.
But Bombardier posted an adjusted net loss of $137 million, or 6 cents per share, for the second quarter.
Bombardier, the latest aerospace group to face scrutiny over past deals, has previously said the Department of Justice and Britain’s Serious Fraud Office are investigating the acquisition and lease of its CRJ1000 aircraft to Garuda between 2011 and 2012.
Bombardier is cooperating “with all inquiring authorities,” a spokeswoman said.
Reporting by Sanjana Shivdas in Bengaluru and Allison Lampert in Montreal; Editing by Saumyadeb Chakrabarty, Mike Harrison and Kirsten Donovan