Business aircraft OEMs report growth in demand for aftermarket services in the second quarter

Business aircraft OEMs report growth in demand for aftermarket services in the second quarter

Second-quarter earnings reports from Gulfstream, Embraer and Bombardier — whose new service center in Melbourne, Australia, is pictured here — reported growth in demand for aftermarket services. (Photo courtesy of Bombardier)

Demand for aftermarket services from the world’s biggest business jet makers rose sharply between April and June, according to comments made by executives on recent earnings calls.

The increase in demand for services is mainly due to the increase in the number of flight hours of private jet operators. According to the latest Global Business Jet Flight Report published by WingX, business jet flying increased by 22% in the first six months of 2022 compared to the same period a year ago. This is also a 21% increase over the number of business jet flights that took place during the same period in 2019 before the pandemic.

Bombardier released its second-quarter earnings report this week, which included $1.6 billion in revenue for the quarter, reflecting 28 deliveries, and a “22% year-over-year increase in aftermarket revenue to $359 million.”

“Our goal of reaching $2 billion in annual aftermarket revenue by 2025 is fully on track,” Bombardier CEO Eric Martel told investors on an earnings call Thursday.

The Canadian business jet maker opened an expanded version of its service center in Singapore in June to meet growing demand for aftermarket services in the Asia-Pacific region. Bombardier is also expanding its facilities in Miami and London and will open a new facility in Melbourne, Australia, later this year.

One of the ways Bombardier has captured more of the demand for aftermarket services from independent maintenance and repair providers is by incorporating SmartLink Plus into new production model aircraft to provide operators with a common digital infrastructure that captures and analyze health, maintenance, and performance data in real time.

Martel highlighted this feature of the new Bombardier aircraft during the unveiling of its new Global 8000 aircraft at the 2022 European Business Aviation Conference and Exhibition (EBACE), calling it “a digital evolution of services that enables our operators to stay connected by plane at any time.”

Bombardier’s chief executive wants to continue to expand the number of authorized service facilities operated by the company in key regions to “bring more of our aircraft home”.

Gulfstream St. Louis, pictured here, is expanding its workforce to increase service and production support. (Photo courtesy of Gulfstream)

Gulfstream is also involved in a significant expansion of its aftermarket facilities, including the addition of new avionics and cabin communications experts to a 24-hour maintenance service operated at its Farnborough service centre. The General Dynamics subsidiary opened a new service facility at the Phoenix-Mesa Gateway Airport in March.

The company also announced a $55 million investment to add 200 new engineers, mechanics and avionics technicians at its Appleton, Wis., facility, according to a June 2 press release. New furniture makers and finishers, upholsterers, aircraft paint technicians and manufacturing engineers are among those being added to the growing workforce at Gulfstream St. Louis.

On July 27, General Dynamics released its second quarter results, with Gulfstream generating $1.9 billion in revenue. “Revenue was up $245 million from the prior-year quarter, or 15.1%, largely due to higher service center sales at Gulfstream and higher service volume, particularly at Jet Aviation’s FBOs,” General Dynamics Chief Financial Officer Jason Aiken told investors on their earnings call last week.

Embraer also reported second-quarter earnings on Thursday, where executives at the Brazilian business jet maker noted it was experiencing a similar increase in demand for services, driven by increased use of its business jets and regional jet fleet. The company is also investing in a significant expansion of several of its service centers, including doubling the usable area from “20,000 m² to 40,000 m²” at its Sorocaba service center in São Paulo in June.

“Revenue came in at $1.90 billion in the quarter, down 10% compared to 2Q11 due to lower shipments in the commercial and defense segments, partially offset by our services and support business unit,” said the financial Embraer CEO Antonio Garcia during Embraer’s earnings call on Thursday.

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