(Reuters) -Bombardier said on Thursday it expects improved revenue this year from business aircraft activities over 2020 as the vaccination rollout in the United States, the world's largest market for corporate aircraft, boosts traffic.
Chief Executive Éric Martel told analysts that aircraft pricing would be in line with what was expected or even slightly better. A rebound in U.S. business aviation traffic to pre-pandemic levels is expected to bolster higher-margin aftermarket services as planes fly more.
Montreal-based Bombardier (OTC:BDRBF) reported a 43% increase in quarterly adjusted profit and used less free cash, helped by a recovery in business aviation, as rising COVID-19 vaccinations encourage travel.
The company pre-flagged earnings on Monday while disclosing it was seeking bondholders' consent to amend terms on eight bond issues. The move followed claims by a bondholder that recent sales of non-core assets breached the terms of certain notes.
Martel told reporters "we feel pretty good about the preliminary discussions" with the bondholders, adding the results of the vote will come out next Tuesday.
Bombardier also disclosed that the United States has joined an ongoing investigation into its sales of jets to Garuda Indonesia a decade ago.
Bombardier has emerged as a pure-play business jet maker after divesting assets, including its rail business to Alstom (PA:ALSO) in January.
Free cash flow usage, a metric closely watched by investors, improved by $357 million year-over-year, Bombardier said. The first quarter book-to-bill, which measures orders to deliveries, was greater than 1.0 on strong sales activity, which is expected to continue into the second quarter, it said.
Bombardier's adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) jumped 43% to $123 million in the first quarter, from a year earlier. Business jet revenue increased by 18% to $1.3 billion in the quarter.
It expects to deliver between 110 and 120 business aircraft in 2021 after full-year deliveries fell 20% to 114 jets in 2020.