Bombardier lifts 2026 free cash flow forecast, sees US trade risk easing

By Allison Lampert and Megavarshini G. Somasundaram

MONTREAL, Nov 5 (Reuters) - Bombardier on Thursday raised its 2026 free cash flow forecast, buoyed by sustained demand for private flying, as the Canadian business jet maker said concerns about US trade tensions had eased and it weighed increasing production rates.

"We're assessing the (trade) risk being, you know, much lower than probably where we were like two years ago, or a year and a half ago," CEO Eric Martel told analysts.

Bombardier has faced pressure from US President Donald Trump's trade war with Canada, including a threat in September to ban the company's aircraft from the world's largest private aviation market.

Trump dropped the threat ahead of Tuesday's midterm elections, citing Bombardier's operations in Kansas. However, the state elected its first Democrat to the US Senate in nearly a century as Trump's Republican party suffered heavy losses.

Martel said Bombardier is weighing whether to increase production rates as suppliers catch up with demand after industry-wide disruptions.

"We have some pretty good improvement in some areas," he said of the supply chain. "But you know we also have some (areas) that just come and go."

Demand for charter flights and shared ownership programs, boosted by cash-rich technology investors, have helped underpin demand for private jets, despite economic uncertainty, geopolitical tensions and soaring jet fuel prices.

Montreal-based Bombardier, which produces a special-mission version of its large-cabin Global jets with Sweden's Saab, has also benefited from rising defense spending in Canada and Europe.

Martel said he expected a growing share of deliveries to go to defense customers and large fleet operators that provide private aviation services to clients who do not own aircraft.

Bombardier raised its 2026 free cash flow forecast to more than $1.3 billion, from more than $1 billion, and reiterated plans to deliver more than 157 aircraft this year.

Free cash flow, a closely watched measure of financial health, rose 20% from a year earlier to $183 million in the third quarter, topping analysts' estimate of $159.5 million, according to LSEG data.

Revenue rose 3% to $2.37 billion, even though the planemaker delivered one fewer jet than a year earlier. Bombardier delivered 33 aircraft during the quarter, while services revenue jumped 19% to $701 million, highlighting the strength of its aftermarket business. Analysts had expected revenue of $2.38 billion.

Adjusted earnings were $1.72 per share, compared with analysts' expectations of $1.73 per share.

The company said it would hold an in-person investor day on February 18, 2027.

(Reporting By Allison Lampert in Montreal and Megavarshini G. Somasundaram in Bengaluru; Editing by Anil D'Silva and Mark Potter)