page 50 Bombardier Inc. Annual Report 2003-04 business jet inventory has declined by 8% from a peak of 2,036 aircraft in June 2003, and stood at 1,872 aircraft at the end of December 2003. A reduction in the supply of pre-owned aircraft is critical, as a firming up of prices in the pre-owned aircraft market makes the choice of a new aircraft more attractive. As at January 31, 2004, 82% of the pre-owned business jet inventory was more than 10 years old. midsize business jet was awarded certifica- tion by the FAA on June 4, 2003, five days after earning similar approval from Transport Canada (TC). On July 31, 2003, this aircraft was also awarded certification by the JAA. Deliveries began in December 2003. was impacted by the transition period between the end of production of the Bombardier Learjet 31A and the first deliveries of the Bombardier Learjet 40, a new product in the narrow-body segment, as well as the entry into service of competitors’ new models. In the light business jet segment, Bombardier Aerospace recently launched its Bombardier Learjet 40 aircraft. In the superlight business jet segment, Bombardier Learjet 45 aircraft deliv- eries accounted for 26% of a 65-unit market for the 2003 calendar year, compared to 25% of a 108-unit market in calendar year 2002. In the midsize business jet segment, Bombardier Learjet 60 aircraft deliveries represented 18% of a 66-unit market for the 2003 calendar year compared to 24% of a 72-unit market the pre- vious calendar year. In the large business jet segment, the Bombardier Challenger 604 air- craft’s market share was 41% of a 58-unit market for the 2003 calendar year, compared to 47% of a 66-unit market in calendar year 2002. In the ultra long-range business jet seg- ment, the Bombardier Global Express obtained 30% of a 47-unit market for the 2003 calendar year, compared to 25% of a 60-unit market in calendar year 2002. The Bombardier Global 5000 aircraft  made its first flight on March 7, 2003 and, as of January 7, 2004, had completed over 100 flights. A second test aircraft joined the program on January 8, 2004. Deliveries are expected to begin in the fourth quarter of fiscal year 2005.  The Bombardier Challenger 300 and the Bombardier Global 5000 compete in the super- midsize and super-large business segments respectively, in which Bombardier had no previous offering. In October 2003, the Bombardier Global Express XRS aircraft was officially launched at the National Business Aircraft Association’s annual tradeshow. This aircraft which is the next generation of Bombardier Global Express aircraft, is expected to offer greater levels of cabin comfort and technology to both passen- gers and crew, while connecting more cities faster than any other business jet. Deliveries are expected to begin in the first half of fiscal year 2006. In the market segments in which Bombar- dier Aerospace is active, it is expected that competition will remain intense between man- ufacturers as new products enter into service. Fiscal year 2005 will be the first full year of production for the Bombardier Challenger 300 and the Bombardier Learjet 40. With the introduction of its new models and improved integrated operations, Bombardier Aerospace believes that it will benefit from the favourable industry outlook and is well positioned for  the future. Through the Bombardier Flexjet program in North America, owners purchase shares  of Bombardier Aerospace business aircraft  with operations and support managed by Bombardier Aerospace, including flight crew, maintenance, hangar fees and insurance.  The Bombardier * Skyjet * program offers on- demand charter services in North America. Through Flexjet’s European and Asian pro- grams, customers purchase hours of flight time instead of shares of aircraft. Bombardier’s North American Flexjet program has partnered with Delta AirElite ** Business Jets, a subsidiary of Delta Air Lines, to market and sell the Bombardier Flexjet prepaid hours program.  As at January 31, 2004, the number of cus- tomers owning shares under the North American Flexjet program decreased to 627 from 664 at the end of January 2003. The num- ber of customers with an hourly flight time For the third consecutive year, the business jet market remained in a weakened state. However, important industry drivers, such as U.S. GDP growth and pre-owned business air- craft inventory levels, are showing positive trends. According to Blue Chip Economic Indicators, published February 10, 2004, U.S. GDP is expected to grow by 4.6% in 2004, up from 2003. The pre-owned aircraft market has been showing signs of recovery in 2003. Based on monthly extracts of the Jetnet database, the worldwide pre-owned Bombardier Aerospace believes its significant new product development investments over the past years have resulted in the most  comprehensive line of business aircraft in the industry and position it well for the future as these new products enter into service. During fiscal year 2004, two new products were awarded certification. The Bombardier Learjet 40 aircraft, a derivative of the Bombardier Learjet 45 business jet, was awarded certifi- cation by the FAA on July 11, 2003 and by the European Joint Aviation Authorities (JAA) on January 9, 2004. Deliveries began in January 2004. The Bombardier Challenger 300 super- Market and prospects Product development Bombardier Flexjet program