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Bombardier sees slight downturn in commercial market, sustained growth in business jets

Assembly of Bombardier Inc.'s Global Express jet being manufcatured at he company's Toronto assembly plant are photographed on May 29 2012.

Fred Lum/Fred Lum/The Globe and Mail

Bombardier Inc. is anticipating a slight downturn in its annual 20-year forecast for the global commercial aircraft market but says business jet deliveries will return to sustained growth next year.

The Montreal-based plane and train maker says it is "confident in the strong, long-term potential of the businesss aircraft industry" and forecasts a total of 24,000 business jet deliveries from 2012 to 2031.

That represents about $648-billion (U.S.) in industry revenues.

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On the commercial side, in the 20-to-149-seat segment, the company sees 12,800 deliveries over the next 20 years, a decrease of 300 units or 2.3 per cent compared to last year's forecast, mainly due to a lower GDP forecast and a sharp increase in the anticipated oil price.

Bombardier released its forecast Tuesday, ahead of the Farnborough International Airshow in Britain, where observers will be closely monitoring the number of new orders it announces.

Of particular interest will be how its new long-range C Series jet performs.

Bombardier is betting big on the C Series, as well as two new business jets in the high-end Global family.

So far, Bombardier has 11 customers who have placed firm orders 138 C Series jets, with options, purchase rights and letters of intent on another 272 planes.

Bombardier said in its forecast Tuesday that the business aviation market continues to recover after some difficult years following the financial meltdown,  but that current market indicators are "mixed."

"Market confidence needs to be fully restored for industry business jet deliveries to increase strongly and enable the industry to realize its full potential."

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This year should be comparable to 2011, but a return to sustained growth is expected starting in 2013, the company says.

Mairead Lavery, vice-president of strategy, business development and structured finance at Bombardier, said emerging markets are playing a bigger role than ever in business jet sales.

"We've made a lot of headway in terms of placing aircraft in this market," she said during a presentation to analysts and media on Tuesday.

The U.S. market is stronger, Asia is very active but Europe is weak, she said about business jet sales.

Mike Arcamone, president of Bombardier's commercial aircraft division, said there are no major glitches in development of the 100-to-149-seat C Series.

"We're exactly where we want to be. The customers have validated the characteristics of the aircraft."

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The first test vehicle will be completed by December and entry into service is scheduled for late 2013, he said.

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