By Allison Lampert and Aatreyee Dasgupta

MONTREAL (Reuters) -Bombardier’s third-quarter revenue beat analysts’ estimates on Thursday, helped by strong demand for business jet parts and repairs.

But the manufacturer of Challenger and Global jets reported cash burn, a metric closely watched by investors, of $127 million during the quarter, compared with positive cash flow of $80 million in the same period last year.

Shares of Bombardier were down 6.4% in midday trading.

CFO Bart Demosky told analysts he expected strong free cash flow performance in the fourth quarter.

The order backlogs of business jet makers are growing as they benefit from a wave of interest from wealthy travellers and fleet operators that has continued since the COVID-19 pandemic.

“The market is well balanced and is proving to be resilient,” CEO Eric Martel told analysts.

But Montreal-based Bombardier, like other planemakers, continues to wrestle with supply chain snags, particularly on engines, even as Martel said other parts like windshields had improved.

Asked whether Bombardier would make a customer advance to struggling supplier Spirit AeroSystems, which produces critical parts in Belfast for its jets, Martel told a media call the planemaker was “being supportive.”

Spirit Aero, a key supplier to planemakers Boeing and Airbus, issued a liquidity warning earlier this week, flagging there was “substantial doubt” it would be able to continue as a going concern.

Martel said Bombardier was no more concerned about Spirit Aero’s financial predicament than it was before the filing, as multiple hits to output, including a weeks’-long strike by Boeing factory workers, battered the supplier’s finances.

“We could see it coming,” Martel said.

“We’ve been thinking about this. We’ve been planning accordingly. But you know, we’re comfortable with what, where the situation is today,” Martel said, adding that Spirit’s work for Bombardier had been running normally.

Martel said Bombardier would be comfortable either doing business with a credible buyer of Spirit’s Belfast operations that produces parts for its Challenger and Global jets, or it could consider acquiring them.

“These scenarios are still on the table,” he said.

Revenue from Bombardier’s services business rose 28% in the third quarter to $528 million.

Bombardier is boosting its aftermarket centres to help it hit a 2025 services revenue target of $2 billion “fairly soon,” as it weighs expansion in the key U.S. market, Martel said. The company reported aftermarket revenues of $1.75 billion in 2023.

Total revenue for the quarter was $2.07 billion, compared with analysts’ average estimate of $1.79 billion, according to data compiled by LSEG.

On an adjusted basis, the company earned 74 cents per share, compared with estimates of 73 cents.

Bombardier delivered 30 jets during the third quarter, compared with 31 aircraft a year earlier, and maintained its full year forecast for jet deliveries of 150 to 155 aircraft.

(Reporting by Aatreyee Dasgupta in Bengaluru and Allison Lampert in Montreal; Editing by Bernadette Baum and Mark Potter)

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