Good morning, everyone, and welcome to Bombardier's 2021 Virtual Investor Day. My name is Francis Richer de La Flèche, Vice President of Financial Planning and Investor Relations. We are very excited to have the opportunity to share with you our path forward as a pure play aviation company, and how we'll unlock the tremendous value of Bombardier's portfolio. Overall, we expect the format to last two hours or so. For the first hour, President and CEO, Éric Martel, our Executive Vice President and CFO, Bart Demosky, and our Executive Vice President, Services, Support and Corporate Strategy, Jean-Christophe Gallagher, will take you through our five-year strategic plan and how Bombardier will become a more resilient and more profitable business going forward. We will transition to a Q&A session where our three presenters will take your questions. Questions will be limited to sell side analysts and institutional investors.
As a reminder, if you would like to ask a question during the Q&A session, please use the number shown on screen, which is also available on the Investor Day 2021 page of our website. Before we begin, I would like to draw your attention to the disclaimer on page three of our presentation. I wish to remind you that during the course of this presentation, we may make forward-looking projections or other forward-looking statements regarding future events, future results, or the future financial performance of the corporation. Several assumptions were made in preparing these statements. These assumptions are based on the current knowledge as it exists today. I wish to emphasize that there are risks that the actual events or results may differ materially from these statements. I'm making this cautionary statement on behalf of each speaker whose remarks today contain forward-looking statements.
With that, I'd like to turn it over to Éric.
Thank you, Francis. Good morning, everyone, and thank you for joining us today. Over the next hour or so, Bart, JC, and I will share our vision for Bombardier and the actions we're taking to achieve this vision. As a pure play business jet company, our goal is to lead the industry in our performance, in the value we provide to customer and shareholders, and in the manner in which we operate, which is with the highest commitment to our people and our communities. In other word, our goal is to bring the same exceptional performance that has defined our aircraft to every aspect of our company. At the same time, we are well aware of what is required for us to be successful as a pure play company. We need to be extremely close and responsive to our customer. We need a highly engaged and nimble workforce.
We need to obtain our position as a technology leader. We need to be active in every aspect of our product life cycle beyond the initial sale, including service, refurbishment, upgrades, and resale. Finally, we need a cost structure and balance sheet that gives us the flexibility to deal with the market cycle and to invest in our future. The plan we're going to share with you today position us to achieve each of these requirement, and delivering this plan is the single focus of our leadership team and our 13,000+ employees. The good news is that we are starting our pure play journey with the industry's premier product portfolio and a strong backlog approaching $11 billion, giving us a very solid foundation to build upon.
Our lineup includes the industry flagship Global 7500, the Global 5500 and 6500, which offer the largest cabin, longest range, and smoothest ride in their class. The Challenger 350 and 650, the latest model from the best-selling jet family of all time. Each of these aircraft was either introduced into new market or significantly refreshed in the last five years, giving Bombardier a portfolio of category-leading product in performance, comfort, and reliability. Simply put, our past investment have positioned Bombardier well in the best, most profitable part of the market, eliminating the need for any large near-term investment, which of course, removes the risk associated with development program. As you all know, in our industry, the biggest risks come during the large investment and development cycle, something that is now behind us.
Finally, when looking at our product portfolio, it's worth noting that our Global and Challenger aircraft are also uniquely well-suited for specialized mission platform. This is an area of growth that will get greater attention and focus in the coming years. Bombardier jets are attractive to government around the world for many of the same reason that make them the number one choice for fractional operators. Their range, reliability, low operating costs, and wide cabins. Moreover, Bombardier jets have proven capabilities with difficult airfield, including short runway and high altitude operations. Our large in-service fleets provide de-risk solutions. From a customer perspective, multi-role platforms, aircraft that can perform medevac, transport, and search and rescue missions with a single platforms are getting more and more attention. With stretched budgets, we expect to see government move from purpose-built military aircraft to modified business jet platform.
Turning now to our five-year market outlook. As you can see on the slide, we expect 2020 will be the low point in deliveries, with a market recovery beginning this year. We estimate that it will take several years before the market recovers to 2019 levels, we expect that the largest growth will come in the segment where we compete, large and medium aircraft. It is important to note that this outlook assumes the continued successful rollout of the COVID-19 vaccines, a gradual lifting of international border restriction, and a continued economic recovery. Of course, if 2020 taught us anything, it is that the future is hard to predict. We will be disciplined with our production rates and not increase them without a solid backlog. Even in this slow growth environment, we see a clear path to value creation.
We believe there is tremendous value within the Bombardier portfolio, and our business is poised to deliver solid financial performance, highlighted by strong earnings growth over the five years. We also expect to turn free cash flow positive next year and generate more than $500 million in 2025. Again, we have a newly refreshed portfolio, one of the industry's largest backlog, and we're well-positioned in the most profitable segment of the market, a market that is recovering from the pandemic. We also have a low risk profile with no development or ramp-up risk, as our major program investment are behind us. Also behind us are the investment needed to grow our service capabilities. This will allow us to further diversify our overall revenue as the aftermarket becomes a bigger contributor with its more resilient and profitable revenue streams. More on this growth and profit driver in a few minutes.
First, I want to talk about the other big profitability drivers, our focus areas as we transition from the COVID-19 crisis and reset our operation. There are four initiative driving our earning growth. They are already in motion. First is capturing the value associated with coming down the learning curve, as we have now reached our targeted run rate of 35 to 40 aircraft per year. Second is delivering on our previously announced productivity and cost reduction initiative. Third is executing on our aftermarket strategy and reaping the benefits of our past investment to grow the network and our capabilities. Finally, we will effectively deploy the proceeds from the BT sales, lowering our biggest use of cash, interest payment, and giving us more runway to execute the rest of the strategy. Okay, let's dive into each of these drivers, starting with the Global 7500.
As I said earlier, the Global 7500 is the industry flagship. Here's a quick snapshot of where the program currently stands. Since its entry to service, the aircraft has met or exceed its performance commitment, delivering an unmatched combination of speed, range, and capabilities. The Global 7500 is also unique in another way. It is the first business jet ever to receive an Environmental Product Declaration. We are proud of this distinction. We invite the entire industry to join us in disclosing, with full transparency, complete environmental performance information for all new aircraft. This is an important step in making our industry more sustainable. With almost 50 aircraft now in service, the program continues to mature as planned. Again, this is important because it means that many of the typical early growing pains and ramp-up risk are now in the rear view mirror.
Despite losing several months of production last year in the early days of the pandemic, we delivered 35 Global 7500, up from 11 in 2019, which is right at the targeted run rate for our five-year plan. From a sales perspective, we are seeing very strong interest, and order activity is robust worldwide. The aircraft also continues to receive very high marks from its owners. I'll share some of that feedback with you today.
Hi, my name is Bill Giannetti. I'm President of Flightstar, and we are a Global 7500 operator in Illinois. The 7500 is now the ultimate corporate jet. There's no question about that. It is undisputed as the king. We've been very impressed with Bombardier's commitment to the products and the evolution of the Global. The 7500 is probably the most beautiful large jet out there. It's a very impressive ramp presence. It has been very reliable. We're very happy with the performance of the airplane. The fly-by-wire system is extremely intuitive. That makes it a lot easier to handle in challenging weather or runway conditions. The Global ride is second to none. It is super smooth. The flexible wing is amazing. It's truly an engineering marvel. With the 7500, as with the other Globals, a very good short field performance.
We will really take the Global 7500 into any airport that we will take a Learjet. The approach speeds are very similar. The Global 7500 is probably the quietest. The galley is very attractive. We have the four sections. Forward club, which is the Nuage seats are phenomenal, and the dining area. Third section, we have a couple of divans in there. We have the dedicated bedroom, which is probably the most exciting aspect of the 7500. Bombardier has never been afraid to commit the dollars and to train the people, and to have the resources in place to support and build and design their product. Their commitment to the service centers, parts distribution around the world is obvious. Even from the standpoint of just coming to the delivery center, what a phenomenal experience that is. It's the most incredible facility.
You drive up to it and you're like, "What in the world is this?" What a great experience that was. Bombardier is really in a class of its own. You can see that Bombardier has invested tons of money in training people, in purchasing equipment, in creating very professional high-level facilities. Extremely pleased with the whole experience with Bombardier. I think a world-class company and definitely a world-class aircraft lineup.
Great feedback from Bill. Very much appreciate the trust and confidence he and our other customer have placed into us. We are committed to providing the very best value and customer experience at all times. Okay. Turning now to the Global 7500 learning curve. As a starting point, it should be noted that this year marks a significant milestone for the program, as the Global 7500 transitioned from being a drag on earnings to becoming the biggest EBITDA contributor over the next five years. As you can see on this chart, a lot of the hard work has already been done with respect to reducing the material and engineering cost. We are now executing on our roadmap to significantly reduce labor costs. This involved incorporating all learning from the floor, reducing the number of build position, and eliminating the need of any out-of-sequence work as our process mature.
Today, we have high confidence that we can achieve an additional 20% unit cost reduction by aircraft 100. Here's why. While we are approaching our 50th delivery, we have already started building aircraft number 89 in our final assembly facility in Toronto. The aft fuselage for aircraft 100 is currently being assembled in our Queretaro, Mexico facility. We have a clear visibility to our actual cost on these later deliveries, and they are coming in on plan. The bottom line here is that delivering on this profitability drive is all about executing on a clear, well-defined plan. Turning now to our second big profit driver. As you know, last month, we announced our target to deliver $400 million in recurring savings by 2023.
The overall goal here is to make the company more efficient and agile, capable of delivering stronger financial performance under the current market conditions, while establishing a lower cost base to grow from once the market recovers. As a starting point now that we are a smaller pure-play company, our fixed cost will come down. This includes collapsing our corporate office group into the business and reducing a layer of management. It also includes the benefit of reduced professional fees, audit, legal, and other consulting costs reflecting our much simpler organizational structure and needs. Currently, we have identified and are executing on specific initiative that will deliver $325 million or 80% of this target. We are confident that we'll be able to identify additional opportunity to close the gap and achieve our $400 million goal. Beyond the reduction in corporate costs, actions underway fall into three main category.
Improving labor productivity in addition to the planned Global 7500 learning curve, cutting indirect spend, and optimizing our manufacturing footprint, as we simply have more industrial and hangar space than we need. These productivity actions not only support our near-term plan, they will also ensure that we have the right infrastructure in place to scale up at a much lower cost base when the market fully recovers. Moving on to our third focus area and profit driver, the aftermarket. The Bombardier aftermarket growth story is simple. As a result of our past investment, we are now positioned to capture a greater share of the growing market. Our strategy is also clear, to bring our aircraft home. JC will talk in depth about how we are going to do this. A couple of key points.
First, this is not a new strategy. We've proven it by delivering results over the past five years. The aftermarket growth I showed you in our five-year plan reflects the fact that we are now hitting our stride, in position to accelerate growth. Second, we are in the final phase of the largest aftermarket footprint expansion in Bombardier's history. To put this in context, we are adding 50% more space to our worldwide network. Importantly, the investment and risk associated with this expansion are largely behind us. Like our other initiatives, this is all about execution. The final point I'll make is that our expanded global services network and new capability allow us to better support our customer and drive brand loyalty. In our business, maintaining brand loyalty is critical to sell planes. Okay. Turning now to the fourth focus area, deleveraging our balance sheet.
Clearly, today, we have more debt on our balance sheet than we would like, and we're going to start addressing this in a number of ways. First, we are going to deploy the cash from the BT sale. We are going to look at a number of options to free up cash in the business to deploy toward debt paydown. The second way we'll address the balance sheet is by deploying the positive cash we're going to generate from our operational improvement and aftermarket growth strategy. As you know, we are coming off a heavy investment cycle, which means we are in good position to prioritize debt paydown over capital expenditures in the coming years. Bart will share more color on the debt management strategy in a few minute as part of his presentation. Okay.
I'm going to shift gears here and spend a few minutes talking about a developing market dynamic that could be tailwind to our plan. As we build our market outlook and plans, some of the key economic drivers we look at are wealth creation and private aviation's market penetration with high-net-worth individuals. In the years prior to the pandemic, the number of high-net-worth individuals was growing at about 10% annually, representing strong growth in a key customer segment. During the same time period, we saw much lower growth rates in both jet deliveries and charter flight hours, suggesting a significant untapped potential for private aviation.
Now that we are a year into the pandemic, we are starting to see an interesting market trend, a surge in new customer, high-net-worth individual to private air travel, as the health crisis has brought renewed attention to the safety and security private air travel provides. You can clearly see this trend in business jet utilization rates, which are well above commercial air travel rates and in the reports and statement of fractional and charter operators. As you can see from this statement, if there is a silver lining to the pandemic for our industry, it is the attention it has brought to the value of private air travel and the wave of new customer.
I think it is fair to say that one of the closest watched trends in business aviation for the next 12-18 months will be the percentage of these new customer who will continue to fly private after the pandemic subsides, and how these newcomers to private air travel will shape and drive demand when business and long-range travel fully recover. Clearly, this new customer base has the potential to drive demand to new highs as international borders reopen and business travel returns to pre-COVID-19 levels. Of course, we are closely watching this market dynamic, which could offer some upside to our plan. Before I turn it over to Bart to walk you through the financial detail of our plan, I want to spend a few minute talking about our commitment to sustainability.
Bombardier has long been a pioneer in sustainability, and we fully accept our obligation to be good stewards of the skies in which we have the privilege to operate. You can clearly see this commitment in our actions. As I mentioned before, our flagship Global 7500 is the first ever business jet to have completed an environmental product declaration, and we have been at the forefront in the push for greater adoption of sustainable aviation jet fuel, which we've been using in our demo fleet for years. In this transition year for Bombardier, as we reset our operation, we are also reaffirming our commitment to pursue ambitious environmental, social, and governance goals. You can see a select number of those goals on the chart. At Bombardier, how we operate is just as important as the results we deliver. The goal is compete and win ethically, responsibly, and profitably. Okay.
Let me stop here and turn the stage over to Bart to give more detail on our financial plan.
Thank you, Éric, and good morning, everyone. Let me start today by sharing my impressions of Bombardier after my first three months with the company. Even before joining, I could see that there is a great opportunity for restoring one of Canada's most iconic companies to a model of strong and consistent financial performance. As I took a fresh look at Bombardier's market potential, its cost base, and capital structure, I became convinced of its ability to return to profitability and generate sustainable cash flows, allowing us to meaningfully deal with our debt over time. In fact, a critical step in the journey towards strong financial performance has already taken place.
With the sale of BT, we are putting the pieces of the puzzle together, beginning with the repayment of our HPS loan facility and with plans being formed for the deployment of the remaining $2.8 billion in sale proceeds towards debt retirement. Achieving a stronger balance sheet isn't something that will happen overnight. We will need time to fully achieve the strategic priorities that Éric has laid out for us. I'm confident we will achieve our goal. To make this plan successful, we must build a more resilient business, one that has a lower risk profile and is less susceptible to market fluctuations. Bombardier will achieve this by diversifying its aviation revenues and with our market-leading product line fully refreshed through relatively low and stable CapEx requirements over the coming years.
As you heard from Éric, to reach our 2025 goals, we will focus on our strengths: an unmatched product portfolio, a proven aftermarket growth strategy, and a leaner cost structure, which we are aggressively pursuing. As we work on enhancing our operating performance, balance sheet improvements will be a priority, which I will talk about in more detail shortly. Now let's take a moment to walk you through our goals for 2025 and the three key elements of our strategy to achieve them. We expect to continue growing revenues at a rate of greater than 5% annually on average and are targeting $7.5 billion in 2025 as we reset post-COVID. Our growth plan can be considered conservative in the early years as we carefully watch how quickly the market recovers. However, we are well positioned to fully capture market tailwinds when they occur.
The real story for Bombardier over the next five years is earnings acceleration driven by disciplined execution of the things we control. We are forecasting EBITDA to grow 750% by 2025. What this means in absolute figures is that we are increasing EBITDA from $200 million in 2020 to $1.5 billion in 2025, and we believe we can post industry-leading margins of approximately 20% by the time our plan is fully executed. Even when excluding the COVID impact last year, this number represents a 300% increase over the $500 million EBITDA we forecast for this year, and I'll take you through the drivers behind this in a moment. It's important first to understand this earnings potential in terms of what it means for free cash flow.
We see our business turning cash flow positive next year on the path to generating north of $500 million of free cash flow by 2025. The key to which will be staying disciplined with our capital expenditures. On that note, we are forecasting fairly stable CapEx of approximately $200 million per year over the next several years. This is a number we are confident in because we are both investing differently and benefiting from the significant investments recently made to refresh our portfolio. Furthermore, our methods for refreshing our aircraft have given us a proven track record to build on for achieving meaningful upgrades at a low cost with less development risk, as we accomplished with the new Global 5500 and Global 6500 aircraft.
Most importantly, by achieving the financial targets I've just outlined, we see our net leverage falling from 10x EBITDA today to approximately 3x EBITDA by 2025, and a reduction in our annual cash interest cost of at least $250 million compared to last year. Let's take a closer look at projected revenue growth, which importantly is evenly split between new aircraft sales and aftermarket revenues at just around $1 billion each. Growth in revenues from aircraft sales is expected in the low single digits, assuming nothing more than stable market share across our product lines. Simply put, this reflects a conservative expectation for market growth over the period before any potential tailwinds from a post-COVID environment and the sales strength of our product lineup.
We are even more bullish on our aftermarket service revenues, with an expectation for growth in the mid-teens and doubling of revenues from $1 billion in 2020 to $2 billion in 2025. While this forecast may seem ambitious, it's based on a proven strategy that has delivered double-digit revenue growth over the past five years. To build on the strategy, we will be opening four new service centers over the 2021-2023 period, which will expand our global aftermarket footprint while providing enhanced access for our customers to bring their planes to us for servicing. When factoring these trends, we see the quality of our revenue mix improving tangibly over the next five years, with the more resilient and profitable aftermarket services business growing from 18%- 27% of total company revenues.
When combined with the 30% or so of our revenues we expect from the Global 7500, we are talking about almost 60% of all revenues coming from our highest margin businesses. In short, we believe this makes our target of 20% EBITDA margins achievable. Let's now look at why we are confident in our plans for growing EBITDA to $1.5 Billion in 2025 by leveraging the three key drivers I referred to earlier: an unmatched product portfolio, a proven aftermarket growth strategy, and a leaner cost structure, which we are aggressively pursuing. Through execution of these business drivers, we expect EBITDA and margin growth to be steady and significant. Most importantly, execution on these earnings drivers is already in motion and largely within our control.
Key to these controllables is the Global 7500 learning curve, transforming a negative contribution profile in 2020 to our largest earnings contributor by 2025, with more than half being contributed by next year and full run rate achieved by 2023. The $400 million cost reduction plan Éric discussed earlier is also skewed to the early years, with more than half contributed by next year and expecting to be fully realized by 2023. Finally, aftermarket contribution will be almost evenly spread over the five-year outlook as growth kicks in with new service center openings and as we draw more Bombardier aircraft owners back to our shops. Given that backdrop, I'd like to provide you with a bit more color on each of the items I've just described, starting with the Global 7500.
We have reached an inflection point in 2021, both on earnings and free cash flow as we start to see a positive contribution beyond the 50th aircraft delivery in the first quarter of this year. We get there by executing on the 20% improvement in unit cost, which Éric explained, multiplied by the expected 35-40 deliveries annually. As we look out to 2025, the Global 7500 is a premium EBITDA margin business, well into double digits and accretive to our EBITDA goal, giving us visibility on the path to stronger earnings. This outlook is based on a couple of key factors. First, we are currently building the 89th aircraft. We are already seeing the positive trend on labor hours and will remove 500 people from the production line over the course of this year. Secondly, our production is sold out through 2023.
We have good line of sight on the price evolution as launch pricing moves out of the equation over time. The Global 7500 contribution is further supported by our cost reduction plan, targeting $400 million by 2023. Most of the actions supporting this target were launched last quarter, we are moving rapidly on the three main categories of costs. The most important bucket is labor, accounting for approximately $150 million of savings. This represents mostly SG&A costs, including the corporate office, some engineering staff as we rationalize our spend, and some indirect manufacturing headcount. This first $150 million will materialize faster than other initiatives, driving most of the 2021 savings. The second category is indirect cost, representing $125 million in savings. We will achieve this through three distinct streams.
First, we are consolidating our corporate office within our aviation operations, which reduces expenses in line with having a smaller, more focused company, from advisor fees to the cost of insurance. Second, we are putting the processes and tools in place, adjusting policies, reducing contractor and consulting spend, and ensuring stringent spend monitoring against our zero-based pure-play baseline. Lastly, we will benefit from the reduction in variable costs associated with our workforce reductions. Overall, these actions should lead to a 10% indirect spend reduction versus 2020. A third item is fixed costs associated with our footprint rationalization. We are reducing overall manufacturing square footage by a full third.
This piece should contribute $50 million to earnings and is based on the sale of a portion of our Saint- Laurent facility in the Montreal area, the downsizing of our Wichita operations, and the sale of hangar space, also in the Montreal area. While this initiative has an operating expense benefit, it is also expected to generate more than $100 million in cash proceeds this year. We are working on a further $75 million in annual savings, on which we have a strong opportunity pipeline already established. Early opportunities focus on our bill of material spend and process improvements supported by our enterprise-wide operational excellence platform. We expect to provide an update on these initiatives by year-end. Let's talk about aftermarket. It's a business that I find particularly compelling for its resilience and its predictability.
It's a lower-risk business, and we are very bullish about our potential for growth. Its key traits include high customer loyalty, low capital intensity, high margins, and a highly variable cost base, making its revenue stream resilient to market volatility over time. A good example of this was on display in 2020. In spite of the pandemic's significant impact on flight hours per aircraft in our installed fleet, revenues were down only 20% and margins remained healthy and stable. To grow our aftermarket business going forward, we have the installed base of close to 5,000 aircraft to which we can offer services and upgrades that no other independent MRO can. J.C. will talk more about this in a few minutes. From a CapEx perspective, we employ an ultra-low-cost model where a typical new facility is leased with limited tooling costs required.
Once in operation, we expect each facility to turn cash flow positive within two years. This is critical for us and a great opportunity to grow our free cash flows. Now that I've talked about our revenue growth prospects and earnings acceleration opportunity, I want to illustrate why I'm equally encouraged by our potential to generate positive free cash flow by 2022, and reach more than $500 million by 2025. Starting with the earnings drivers that I've already spoken about, we are working towards a $1.5 billion EBITDA plan. Secondly, our products have been recently refreshed, allowing us to sustain a disciplined capital program in the $200 million range per year. Further, the absence of new product launches keeps working capital investments to a minimal level, and cash taxes will remain minimal for some time as we benefit from significant tax asset pools. This brings me to the interest cost.
Today, this is a large burden, but as we start generating free cash flow next year, we are confident we can both reduce debt and eventually the cost of debt. The annual cash interest cost is expected to decrease by greater than $250 million on a run rate basis, down to approximately $550 million as we deploy the BT proceeds in the weeks to come. Additionally, we believe that by 2025, our plan can lead to a further reduction in interest as our credit quality improves and we refinance maturities. This will bring our cash generation more in line with our leverage, which leads me to our balance sheet and our approach to reshaping it, along with our capital structure, in order to support our strategic plans. We will be taking a phased approach.
In the short term, we expect to deploy proceeds from the sale of BT towards debt reduction. Our focus will be on near-term maturities as we look to clear a minimum three-year debt maturity runway to focus on operations and execute our plan to grow earnings and cash flow. To fund these actions, we expect that the $3.6 billion from the sale of BT will come fully into play by mid-year, as we monetize the Alstom shares and put to work the cash reserves on our balance sheet. As I mentioned on the earnings call in February, free cash flow seasonality and inter-quarter needs require us to have $1.5 billion-$2 billion of cash on hand. This is clearly not optimal, and we will opportunistically look to free up a portion of this cash through putting in place additional normal course working capital facilities.
Our recent repayment of the HPS facility in mid-February frees up our collateral and could help us to achieve this goal. In parallel with these actions, we will look to opportunistically refinance and extend debt maturities. Achieving these objectives will allow us to focus on our operations and execute on our growth plan in order to grow earnings and cash flows over the next three years without distractions from debt maturities. Over the longer term, free cash flow generated from the business will be allocated in a disciplined way to invest in our products and services or towards debt reduction. As we progressively reshape our business and reap the benefit from our various initiatives, net leverage should progressively come down from the current 10x EBITDA level and reach approximately 3x EBITDA by 2025. Let me stop here and summarize our plans as follows.
Our 2025 goals are all about operational excellence and driving financial performance. As a pure-play business jet company, we are entirely focused on what we do best, and we are de-risking the business model to both unlock our full potential and be more resilient to market volatility. Our strategy is already in motion with positive business momentum and early signs of a market recovery. We remain disciplined in our approach to navigating uncertainties in the short term and see great potential towards 2025. Finally, we are strengthening our balance sheet proactively, creating a debt maturity profile which allows us to focus on realizing the full potential of this business while also staying agile on our path to heal the balance sheet. On that note, I will turn it over to JC for a deep dive into our products and markets. Thank you very much.
Thank you, Bart. I'd like to put the context and data we have provided in our plan into perspective. That's why we'll focus the next portion of today's meeting on one of the key recurring themes, our amazing products and services, and the strategy behind them. Really, I have the easiest job of all today because our planes and our people are exceptional. Forgive me if I'm too passionate about what we deliver and what we do, but I hope that you can get a glimpse of just how proud our workforce of more than 13,000 people really is, and how each one of us stands behind our products every day. Let's start by looking at the market space in more detail. In the last five years, Bombardier has delivered an average revenue market share of about 32%, which demonstrates the strength of our product portfolio.
Today, the market is expected to grow by about 25% going into 2025 compared to 2020. Our plan is to maintain the average share that we've had over the last five years in this growing market. This will lead to our deliveries growing back to 2019 levels by 2025, which is something we know how to do very well. While it's a conservative plan, it allows us room to further capture incremental opportunities as we move forward. At our last earnings call, we announced that Bombardier will focus on aircraft in the large and medium categories. We further announced the ramping down and end of Learjet production towards the end of 2021. One of the drivers behind this very difficult yet strategic decision is that the large and medium categories will generate approximately 90% of total industry revenues from new aircraft deliveries.
These categories have also shown greater resiliency throughout economic cycles. Bombardier is extremely well-positioned for success in the large and medium categories. Between our Challenger 350 up to our Global 7500, we have a diverse portfolio of competitive business jets priced between $20 million and $75 million to capture market demand. This entire portfolio was updated and refreshed in the last five years. Our family of Challenger and Global aircraft are highly competitive. Let's take a look at the products. I'll begin with the industry flagship, the Global 7500. It's simply the best aircraft in private aviation, and it sets the benchmark for the most exceptional business jet experience ever. It has the industry's best cabin and best performance. This is highlighted by the numerous awards that it has collected since its entry into service.
We're extremely proud and pleased with how customers and the industry have received the Global 7500 since its entry into service in late 2018. We are fast approaching the delivery of the 50th customer aircraft, and the in-service fleet has accumulated more than 7,000 hours. The Global 7500 is not only operating as we intended, but it is exceeding our expectations with dispatch reliability already achieving those levels of a mature fleet. As the industry's pioneering true four-zone cabin, the Global 7500 provides an unprecedented level of customization potential for customers. Its cabin is 12 ft longer than the Global 6500 and includes an available master suite with a full-size bed, a dedicated crew suite, a large full-scale kitchen, and a dining suite that can accommodate six people comfortably. Speaking of comfort, the Global 7500 aircraft offers the lowest cabin altitude among our fleet.
It also has the innovative Nuage seat, which redesigns comfort with its revolutionary deep recline feature. From a technical standpoint, it's the first new seat architecture in business aviation in 30 years. The performance of this plane is equally impressive and stands out among competitive aircraft. This amazing business jet flies farther and faster, and it can access extremely difficult airfields. It can fly an industry-leading 7,700 nmi. Shortly after its entry into service, we flew from Singapore to Tucson nonstop, which is more than 8,000 nmi, and we still had leftover fuel in the tank once we completed the flight. It's also super fast. It can fly at Mach 0.925, which is nearly the speed of sound. To put this into context, we flew from Los Angeles to New York in just three hours and 54 minutes.
Despite its impressive high-speed performance, the aircraft can also land at extremely difficult airfields such as Gstaad, Switzerland, or London City. This is due to Bombardier's unique engineering of the Global 7500's revolutionary wing, which allows for equally good performance in high speed as well as in low-speed conditions. And seeing is believing. But really, once you see what the Global 7500 can accomplish, you might not believe it. Let me show you what I mean.
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Isn't that impressive? The Global 7500 is an all-around, no-compromise aircraft that simply can't be beat. Now I'd like to jump to the Global 5500 and Global 6500 aircraft, which entered into service in the last year. These next-generation business jets have inherited all the outstanding features from the high-performing Global 5000 and Global 6000 in terms of unmatched reliability. We fully refreshed the interiors, improved aerodynamics, and equipped a new engine. Deep down, they still have the winning DNA and smooth ride of the original Global aircraft, of which we've delivered more than 800. The Global 5500 and 6500 business jets have the largest cabins in their class, with three living areas that offer customers wide open space and ample room to stand and maximize their movements. The innovative and extra wide Nuage seating with higher armrests also provide a more comfortable and relaxed flight experience.
The Global 5500 and Global 6500 aircraft provide unprecedented range performance with a new purpose-built engine and a next-generation wing that delivers refined aerodynamics for an exceptionally smooth ride. These features also bring a whole new level of performance to the aircraft, especially in hot weather and high altitude conditions. They have the agility to get in and out of difficult airfields, like London City, for example, that other aircraft in the same class can't access. Moreover, the performance enhancements we've made to these planes open up brand-new city pairs for that segment in private aviation. They can fly up to 500 and 600 nmi farther, respectively, than their predecessors. Global aircraft are renowned for their outstanding reliability and performance. They are highly valued for their endurance, agility, and they excel in demanding conditions. This is evident in the platform's dispatch reliability rate, which is second to none.
Moving on to the Challenger 650. It's been the best-selling platform in the history of private aviation. There's a reason for that. It's highly reliable, has the widest cabin in its class, offers a range that meets our customers' needs, and has the lowest direct operating cost in its class. This is exactly why we've delivered more than 1,000 Challenger 600 series aircraft. If we look at the cabin, it has the same cross-section as the Global with two zones, and it's priced below $30 million. Customers purchase this aircraft to enjoy the peace and comfort that this wide cabin provides in this category of aircraft. When you're flying a range of more than 4,000 nmi, it's essential for customers to elevate their comfort to a whole new level. We also brought the dispatch reliability of this platform to an unprecedented level of 99.9%.
This is why the most demanding operators, such as the air ambulance and maritime surveillance operators, choose the Challenger 650 over many other competitors. Simply put, this aircraft can be trusted to go when you're ready to go and at all times. Now we've arrived at the best-selling aircraft in private aviation to date, the Challenger 350 business jet. A true powerhouse in this industry. It's the best-selling aircraft in its class year after year, and it's the benchmark to which every other super midsize aircraft is compared. If you look at the most successful fractional and charter operators in the world, whether that's Flexjet, VistaJet, or NetJets, you'll find a Challenger 350 aircraft. It's the undisputed champion. The Challenger 350 has been successful since it entered service and remains at the top of its game. Over the years, Bombardier has constantly enhanced it.
For example, we recently introduced cabin soundproofing technology, refreshed aesthetics in the cockpit, a head-up display with enhanced vision, Ka-band high-speed internet connectivity, and we've been steadily improving performance, including steep approach capability. Another essential feature is its unmatched dispatch reliability, which it gets from its predecessor, the high-performing Challenger 300, and it's a major reason behind why we sell so many. With the Challenger 350 aircraft, you get the complete package of reliability, range, speed, performance, cabin experience, and operating costs. It's the only jet in its category to have all of these key winning ingredients. In my opinion, this is also the best-looking plane in the history of business aviation. These delivery numbers speak for themselves. We delivered more than 300 Challenger 350 aircraft in a few short years. We are leaps and bounds ahead of the competition.
It has solidified its status as the most delivered aircraft in the medium category for many years. The list of achievements goes on and on with no signs of letting up. Now that I've given you an overview of our fantastic product portfolio, I'd like to talk about our leadership position. We built a conservative plan based on maintaining our leading market share through time. We see many opportunities to expand our position. As a company, we have the right combination of three fundamental elements. One, our product portfolio is the best in the business. It's perfectly positioned to capitalize on market trends. Two, we have a large install base of loyal customers around the world who will be looking at us for replacement aircraft. Three, our customers know that our aircraft are reliable and that we are there to support them.
What they will now see is a concerted effort to take this network and their ownership experience to a whole new level. This brings me to a very important part of today's presentation, a topic that is very close to my heart, the growth of our aftermarket business. Bombardier's installed fleet represents nearly 5000 aircraft today. It's the largest fleet in business aviation. While it's growing, it's also aging, leading to a 4% annual growth of our total aftermarket size. We're poised to capture a larger share of that growing market. 2020 was a year that also demonstrated how resilient the aftermarket business is. While we saw a decline of 20% in revenues, we maintained profitability. The aftermarket represents not only a growth opportunity, but also a stabilizing force in Bombardier's portfolio through economic cycles.
We're very confident today that the flight hours driving this business, after having recovered to more than 80% of what they were, will reach again their full potential in 2021. We have a proven track record and an executable growth strategy to further mature our aftermarket business. We launched the transformation of this business back in 2016. We've proven that we can achieve double-digit revenue growth year after year, and with an even larger yearly increase in profitability as we experience economies of scale in maximizing our parts distribution network. Through that time, one key factor has given us a strong tailwind: customer satisfaction. Above all, it's a key enabler for our growth, which has been a win-win for Bombardier and our loyal operators. Here's an example.
My name is Rick Rogers. I'm the Director of Aviation, Chief Pilot for a Fortune 500 based in the Midwest. We recently completed the purchase of three Challenger 350 aircraft. Having operated numerous aircraft from other manufacturers, the one area that we really strived this time to ensure that we would receive the greatest support possible was on the customer service front. The CRC being staffed 24/7/365 gave us a great sense of comfort that regardless of what problems we may have, that we would get the support we needed immediately. Operating our aircraft roughly 600 hours per year, it was important that we receive the greatest amount of uptime as possible.
The ability to go an entire one year between inspections or a little more gives us the opportunity to reduce our supplemental charter cost, as well as guaranteeing that we have more uptime and that the aircraft are available to the maximum extent possible from a financial perspective. Well, from the very beginning, we've received an incredible level of support from everyone at Bombardier. For the first six months prior to delivery, they had spent more time with us than all the previous manufacturers had in 10 years of operations with other types of aircraft. That hasn't ceased or stopped or slowed down since we've taken delivery of the aircraft. You have some of the best qualified, most motivated employees we've ever dealt with in the aviation industry.
In my opinion, Bombardier leads the industry with customer service, the quality of the product, the reliability of the product, and the customer service that continues on after you purchase the aircraft.
Going forward, we are targeting a $2 billion revenue level by 2025, which conservatively mirrors the growth we've been able to generate in the last five years. Along this journey, we've remained consistent in this strategy, which is to Bring Your Jet Home. Bring Your Jet Home is about Bombardier working on its own aircraft in its own facilities. We are best placed to do this because we have the engineering expertise and the best-trained people to provide a level of service and experience that just transcends everything else. Beyond that, Bring Your Jets Home, from a business perspective, is a parts channeling strategy. As we work on our own aircraft, we're able to distribute more of our own OEM parts without an intermediary. OEM parts carry the highest quality level possible, longer warranties, and ultimately provide more value to customers.
This strategy complements our Power by the Hour program, which currently has approximately 1,500 aircraft enrolled and provides recurring revenues based on long-term contracts. Our focus is also on expanding the number of aircraft enrolled in that program we call Smart Parts. How do we bring our jets home? We need to build and expand our infrastructure worldwide. Today, we've already started all the key investments to build that infrastructure, and in the next two years, we are completing our worldwide infrastructure expansion, which will have increased our overall footprint by 50%. As we become more productive in that space, we will be able to apply twice the number of maintenance hours as we move toward 2025. We are also adding new capabilities to offer turnkey solutions to our customers, capabilities such as component repair, engine maintenance, interior modifications, and paint, among others.
These added value services complement the regulatory maintenance capabilities offered at our service centers worldwide, essentially leading them to become a local extension or satellite of our own manufacturing capabilities. What does this expansion look like? The heart of our support infrastructure beats in Montreal, where we coordinate our worldwide support activities through our 24/7 Customer Response Center. Through the CRC, our worldwide fleet of mobile response trucks and line maintenance stations support our customers close to where they are based, establishing trust and confidence that is essential to building customer loyalty. Strengthening the core of our relationship with customers through these entry points of services motivates them to bring their jets home to our service centers, where we can provide heavy maintenance and even more value-added services.
Our worldwide service network expansion began a few years back when we deployed new facilities in key locations such as China, Singapore, and the U.K. A series of smaller scale expansion followed in the U.S. and continental Europe. Today, even larger expansion projects are coming to fruition worldwide. Let me show you where the expansion of our footprint is taking place. Late last year, we acquired full ownership of a facility in Berlin in which we had a small share in association with Lufthansa and ExecuJet. Berlin is an important part of our service network, and I'll explain why. We've been supporting customers at this facility for 20 years. Berlin was the original Bombardier Business Jet Service Center for Europe back then. Today, Germany has the highest density of Bombardier aircraft in Europe, and we now have a wholly-owned heavy maintenance facility strategically located in this important market.
Supporting this facility, we are proud of the approximately 250 dedicated and talented employees that bring highly technical skills, a profound understanding of Bombardier aircraft, and solid relationships with our long-term customers. Singapore was our first significant expansion into Asia-Pacific, which began with a small hangar in 2012. With the growth of our worldwide fleet and the ability of our aircraft to fly farther, we saw the importance of Bombardier having a presence in Singapore, a significant aerospace hub. Today, we're in the process of completing a massive expansion of this facility, which will be ready by the summer. The expansion will quadruple the amount of space, including two full bays dedicated to a paint shop and providing tip-to-tail capabilities for customers. The Singapore facility is a central hub for Bombardier in Asia-Pacific and firmly positions us as a leader in aftermarket services in the region.
Our London service center, located at the Biggin Hill Airport, opened in 2017, and we are now expanding it to create an even larger facility. Since we opened here, the Biggin Hill Airport has seen unprecedented levels of growth in terms of airplanes flying in and out. This expanded facility will be one of Bombardier's new super centers and will offer customers a wide range of service capabilities. The facility's location is what makes it ideal. It's within a seven-minute helicopter ride from downtown London, where so many of our customers from the Middle East, Asia, the Americas, and Europe fly in and out many times a year. The next location in our footprint expansion is Melbourne, Australia. It's an important market for us, where Bombardier is currently delivering many Global aircraft.
This new facility is located at the Melbourne Essendon Fields Airport and will be ready in approximately one year. This is a general aviation airport within minutes of downtown Melbourne, and it will allow us to service and grow the 100-aircraft strong Bombardier fleet in Australia as we move forward. Finally, the new flagship service center for us in the U.S. is located in Florida. It will enable us to capture demand in the southeastern U.S. as well as from Latin America. This is our brand new Miami-Opa Locka service center, which will be the largest service center under one roof in the U.S., and it will provide tip-to-tail capabilities for all aircraft in the Bombardier fleet. This facility can support up to 16 Global 7500 aircraft simultaneously and will cater to the larger aircraft being delivered to the U.S. market as we move forward.
It's truly an amazing facility, and in fact, Éric and I were there in the last few weeks, and we're making great progress to deliver an operational facility in 2022. Beyond the investments in our physical footprint around the world, a significant part of what the aftermarket team is focused on is improving our digital infrastructure to provide new and innovative services for customers. A key strategy is for us to connect our fleet with technology that enables these aircraft to be in sync with Bombardier's customer service response teams in real time. Such advanced technology and the use of big data will allow us to enhance our customer service response times and effectively and efficiently troubleshoot customer aircraft. We recently began a campaign that will see us start to retrofit our existing install base with Smart Link Plus.
This will provide added value to our customers and entice them to bring their jets back home into our service infrastructure, allowing us to capture more aircraft in our own service facilities. We're excited to offer the Smart Link Plus program. Please take a look at this video, which provides additional information on this new and revolutionary capability. As we continue to enhance our infrastructure, both physically and digitally, our vision for tomorrow is to engage our customers throughout the ownership life cycle. Our increased infrastructure offers an opportunity for us to be more involved in every aspect of customers' ownership experience through the life cycle of their aircraft, something we traditionally haven't been involved in before. The future of business aviation lies in the ability to expand beyond simply selling and maintaining aircraft.
As a pure-play business jet company, we can now focus on diversifying our offerings to further grow the aftermarket business. We need to set our sights on new opportunities, such as the management and handling of aircraft, upgrades and modifications, aircraft resale, and late life disposal, where business jets have more value being torn down than being resold. Having the OEM involved in these opportunities is advantageous because it deepens our connection to our customers, allows us to be with them through the various stages of their ownership experience, and it also help us increase our share of new aircraft deliveries. As we've outlined today, we have a resilient business with great potential for growth. As a result of our past investments and proven strategy, we are positioned to capture an even larger share of the growing market through services and support.
Growing and diversifying our services through new capabilities and opportunities will allow us to better support our fleet, increase customer satisfaction, and drive brand loyalty. These are key to maintaining relationships and ultimately helping to sell more aircraft. This is an overall view of the aftermarket strategy and the vision of how we are going to grow our aftermarket business to 27% of our revenues by 2025.
Thank you, JC. This concludes the formal portion of today's event. Hopefully, you all now have a clear understanding of how we will unlock the tremendous value in Bombardier's portfolio. With our unmatched product lineup and the actions we discussed today, executing on our aftermarket growth strategy, reducing our cost structure, maturing the Global 7500, and addressing our balance sheet, Bombardier will become a more resilient and more profitable business. With our market in recovery and each of our key initiative well underway, we are confident in our ability to deliver. With that, we will now take a few minute to share a video showcasing our exceptional company, and then Francis will go over the instruction for our Q&A session.
We'll now begin our Q&A session, which will run about one hour. Questions will be limited to sell side analysts and institutional investors. If you would like to ask a question during the Q&A session, please use the number shown on screen, which is also available on the Investor Day 2021 page of our website. We're now ready to begin. I'll turn it over to the operator for our first question. Operator?
Thank you. Good morning, ladies and gentlemen, and welcome to the question and answer portion of today's Investor Day presentation. Our first question is from Seth Seifman from JP Morgan. Please go ahead. Mr. Seifman, your line is open. You may proceed with your question.
I think I was muted. I apologize. Sorry.
Go ahead.
The danger of these times. Bart, I wonder if maybe you could just start off with sort of a detailed walkthrough how the BT proceeds are going to be deployed through this year. Then when we think on a pro forma basis, the $550 million of interest expense that you talked about, is that kind of the go-forward interest expense until there are further efforts to address the capital structure?
Good morning Seth, thank you. Great question. As we begin to, well, actually, we've already begun to deploy the funds from the BT sale. We've already deployed just about $800 million to pay down the HPS loan, which has the added benefit of freeing up the collateral that supports that facility, I'll talk more about that later, I'm sure. We're very much focused on deploying the remaining proceeds towards debt, first and foremost. We will have a target on the nearer-term maturities. I would add that we obviously want to be, I think very structured in the way we go about this and optimal in the way we deploy the cash to minimize the negative carry that we currently have.
Regarding the interest expense reduction that you mentioned, we would see that $250 million run rate of interest expense reduction achieved by about the middle of this year. We expect to have fully deployed the proceeds from the BT sale by then. If you're trying to do the math on that, it's simply with about an additional $3 billion of cash to deploy, and a roughly average 8% coupon that gets us to close to that $250 million mark. We do want to work continually on reducing interest expense further. It's one of our largest expenses in the company. We think that the outlook that we've given for both EBITDA and cash flows by 2025 is conservative. With ourselves turning to free cash flow positive by next year, we're confident we're going to have incremental cash to deploy towards further debt reduction to bring the interest expense down.
Ultimately, it'll be about building a sustainable balance sheet and de-risking the company, but that's the plans today, Seth. Hopefully that helps.
Yeah. No, absolutely. If it's possible to kind of walk through the guidance, including the special items for the better than $500 million of cash burn this year, going from there to positive next year, just walking through the underlying operations, the interest, the special items-
Sure.
The facility change that's happening and uncertain and everything.
Okay, Seth. Yeah, sure. This year, we are forecasting a free cash flow burn of better than $500 million. There's a few critical items that are going to support us getting to a positive cash flow next year. The first one is that we do have some non-recurring items that are occurring in 2021. Those are approximately $200 million. Part of that, which is the RVG, will also occur in 2022. That's about $60 million. We are working on reducing our costs within the business very hard. Éric spoke about that in detail in his comments, as did I, we would expect that to contribute about $150 million as well. It's building up further. We also have earnings growth coming from the Global 7500. Although that is skewed towards 2023, we will start to see good benefit in 2022 as the platform becomes more and more profitable.
Of course, we've got interest expense reductions of $250 million run rate by 2022, albeit part of that, we won't get that fully in 2021, that's partially offset by about half. We see a clear line of sight to get to a positive cash flow at almost entirely through things that are completely under our control or are already in flight, particularly with the cost reductions on the Global 7500.
Okay.
If I may-
Okay.
If I could just add-
Please, yeah.
one element. There's also the cost reduction program that we've announced of $400 million by 2023, Seth. I think we've already have made significant progress having the initiative already starting to pay off. This year, there'll be, as we said, an EBITDA contribution of about $100 million. Next year, it's going to be in the area of the $250 million. We're making quick progress there, and that of course will contribute to our free cash flow improvement next year.
Okay, great. Excellent. Then maybe one follow-up for JC if I can. Just when you think about within the aftermarket revenue mix now, when you think about the mix of spares versus services, and then think about how that looks at the end of the plan in 2025, just in terms of ballpark numbers, is there anything you can tell us about how that evolves?
Absolutely. Thank you for the question, Seth. When we look at the forecast for Bombardier's aftermarket going forward, we go from bottom up. We look at scheduled maintenance going forward, unscheduled maintenance going forward, we look at modification and upgrades. We're very confident in our forecast for the growth of that market, which we've mentioned is about 4% per year. That's because we have very good visibility on all of these different elements of the fleet. The plan is to go from the 38% share that we have today, which is already much better than what we had in 2015. We were at about 26% back then, and we're looking to be at roughly 50% of that market by 2025, hence the $2 billion revenue level that we've set.
The largest part, to your question, of that revenue is obviously our parts. Parts is really the core of our aftermarket business, and our increased focus on maintenance is really a parts channeling strategy. For us, it's really about developing the lowest cost possible channel to market. When we look at how historically this marketplace has operated, we've worked with a lot of third parties, and the way we've structured this market is by giving significant discounts on our parts to these third parties so that they would work on our own airplane. As we move forward, we're looking at applying those hours ourselves, and that's by far the lowest cost channel to market for these parts, which are the most significant part of our plan as we move forward.
I think, if I may, JC, access to our facility is definitely going to bring quite a bit of growth also to our aftermarket business. We've been there before. When we built it in 2012, the Singapore facility, we built it at a certain size because we were not serving that market at all in that continent. An airplane had to fly to North America, which was making it very difficult if they wanted to reach out to our service center. As soon as we had that presence in 2012, the business has grown. People are coming to our facility because we're available, we have parts, we have capability, very capable people also to take care of their airplane. I think the proof is there.
Right now, we are tripling the size of Singapore to be able to accommodate even more customers, because the demand is there. That's the strategy that JC has been pursuing right now with all the service centers that will come into service in the next coming months.
Great. Thank you all very much.
Thank you, Seth.
Thank you.
Thank you. Our following question is from David Strauss from Barclays. Please go ahead.
Great. Thank you.
Good morning, David.
Morning. I just wanted to put this 20% EBITDA margin target in context. I guess, how do you benchmark that against where the business has been in the past, number one, where your peers are today, and the high point that you've seen out of any of your peers over, call it, the last 10-15 years?
It's a good question, David. We do study, of course, and we do benchmark ourselves with our peers. We have comparable. We would be looking at sales per employee, different benchmarks as an example. We feel very strongly about where we are, in terms of the capability to deliver that EBITDA growth over the next coming years. I think we've been in the double digits before. Of course, right now we are prudent with volume. I think, as we said, we want to change the mix also. Our aftermarket business is a good profitable business. We'll have a bigger piece, of course, of the pie. We are going to have the impact of the cost reduction program that we've announced also that will help our EBITDA to grow.
The major turnaround in the next six-12 months is also the fact that the learning curve on the 7500 is coming down. If you look, we've already achieved about 40% reduction at airplane 50 from airplane one, and we're aiming for another 20%. When we compare ourself on the hours that are needed on other platform, this is clearly achievable. We feel very comfortable that we will achieve this plan also in that sense. Between the cost saving program, the Global 7500 stabilizing and reaching out to airplane 100, and the aftermarket growing, we feel very solid in being able to build that EBITDA that we are guiding today.
Hey, Éric.
Yeah, go ahead, Bart.
Hi, David, it's Bart here.
Hi.
Just a quick add on to what Éric was just speaking about. In terms of the drivers of EBITDA growth over the next five years, I think it's important to keep in mind that about 90% of those drivers, as we see it right now, are within our control and largely baked in. We're well through our cost reduction activities. We're well along the learning curve of the Global 7500. Éric spoke about we're at our 89th aircraft now on the production line. We know what our cost curve is and where it's going to go to from here. As well with the previous five years of growth that we've seen in the aftermarket business that JC's been leading and a proven strategy with more to come, we're confident that that's going to contribute significantly to our EBITDA growth from here.
The one offset to that is we're being very conservative in our view on growth in new aircraft sales. If we did see a return to past days with much higher sales, that could bring the overall margins down a little bit, but that would be a first-class problem to have, believe me.
I think it's important what Bart is saying here, David. Our plan is not built on a major growth volume. It's based on performing. The plan is, you look at the number of airplane we're planning in the next future. We're in the 130-ish figure. We've done 200 in the past, so the capability is there, but it's not what our plan is built on. We have a potential upside also, if we have a little bit of tailwind. The market right now, with the pandemic, our customer are really seeing the market right now and the business jet as a solution for staying healthy and being safe. We've seen tremendous momentum. Some of our customer were talking about it today, mainly on the fleet operator side. We've seen the inventory on used aircraft going down.
There's a lot of leading indicator here that we are seeing new customer adapting business jet, but it's not baked in our plan. This is a potential to grow our backlog and makes our backlog more solid, and we'll be extremely disciplined in the future if we have to increase the rate doing so.
Éric, if I can add on this.
Yeah.
There's a good statistic we look at, which is the percentage of first-time buyer that actually comes and buys a Bombardier aircraft. What we've seen in 2019 is that percentage was roughly 16%. What we saw in 2020, and especially with our sales late last year, was that percentage went up to 24%. We see a lot of interest from first-time buyer in the marketplace right now.
Yeah. Good point.
Great. Thanks for the detailed answer. As a follow-up, Bart, I wanted to ask about a couple of the drivers within your free cash flow forecast. Working capital, you're showing as neutral, but wanted to see if you could dig a little bit into the pieces there. I would think there would potentially be some inventory unwind on the Global 7500. Also pension. I didn't see pension anywhere in this. I think pension is a pretty meaningful cash headwind in terms of the contribution. What does that look like over the next couple of years, and what opportunities do you have to reduce that liability beyond discount rates going up? Thank you.
Yeah, David, thanks. I'll maybe start with the pension piece because we really don't see it as a headwind. We do have an accounting deficit in our pension plan of about $1.5 billion. We've been very disciplined in terms of making our mandatory and regulated contributions over the years and will continue to do so. We've also been very fortunate to have a world-class team of investment management professionals working in the company for years, and with outside advisors. They have consistently performed at or above the market performance and the benchmarks that they look at. We are in a very good position on our pension and pension deficit going forward. We don't see that as a headwind.
We have built in, of course, though, that we will continue to make contributions and would expect to do that as we go forward, but nothing over and above what we've had do in the past. In terms of working capital, you mentioned flat, and we do see it as being flat. It's about $400 million currently. We'd probably see that ticking up a little bit as we move into a higher production rate and ramp-up rate on the 7500 in particular. Of course, if aircraft sales are stronger, based on the trends that Éric was just walking through, we could see a little bit more working capital needs. It'll follow market demand, and we believe that investment inventory management will be key to that. We'll be very stringent on that and are working strongly with our vendors to help us in that regard.
With backlog in place and growing, we'll be working hard to make sure that our customer advances mirror the working capital requirements for each of our aircraft. We're not seeing a big increase there. In terms of the build-out of the free cash flow from where we are today, I talked a little bit about that earlier with earnings. Obviously, there's our target to generate greater than $500 million. Interest costs will be coming down by $250 million. That's a key component to it. Non-recurring liabilities, as I mentioned, will contribute about $100 million-$150 million of that. The learning curve on the $75 million will be a very significant contributor. That'll be $400 million in total, or more than $400 million actually.
The cost reduction initiatives that'll be fully baked in and at full run rate of $400 million by 2023 will also be in place. You can see that a lot of this is actually front-end loaded and comes by 2023, and that's why we have a high degree of confidence in our greater than $500 million by 2025. Hopefully, that helps, David.
Absolutely.
Okay, perfect.
Thanks very much.
Thank you.
Thank you, David.
Thank you. Our following question is from Fadi Chamoun from BMO. Please go ahead.
Morning, Fadi.
Thank you. Good morning.
Good morning, Fadi.
Bart, what do you think is the right leverage for this business longer term? You're getting to 3x in 2025. It feels like the biggest risk to this profitability improvement program is the issues that are outside of your control. You're still going to be financially levered as you execute in the next five years on this plan. To the extent that there is some other events outside of your control that could represent a risk to that plan. That's, I think, what has consistently happened in the past. Five-year plans get offside as economies change and demand change and all these kind of things. Has there been consideration for alternative ways to de-lever faster, to recapitalize the balance sheet, including an equity proportion?
It feels like still by 2025 and with this very strong plan that you have, you're still financially levered even then.
Yeah, Fadi, great question. I'll take it and then happily turn it over to Éric as well and JC to add comments. Today we have a net debt of $4.7 billion, and that's clearly more than we would want, even once we've grown the business and delivered on the operational excellence and the financial performance of the company. I would tend to agree with you. We'd like to see more improvement in that. We're not anticipating or contemplating equity issuance today. We need to be mindful of dilution, and we believe we have a really great plan to give the business time over the next several years to really find its legs, perform, deliver on the things that we know we can deliver on, which I was just describing, and build in greater financial performance for the enterprise.
The earnings growth and cash flow generation will certainly help us do that. Longer term, to your point, we won't close our eyes to other options to recapitalize the balance sheet further, but we really want to see how the business can perform first before we look to alternatives. We have so much of the benefit of the work that we've already done, the investments we've made in the fleet, the investments we've made in the learning curve of the Global 7500, and the cash we have coming in, or that we have now to de-lever and bring interest expense down, that we're highly confident we'll get to the 3x level. I'm a big believer in having what's called dry powder on the balance sheet, which means being a little bit under-levered towards your long-term targets.
We'll see where we get to over time, and we will be free cash flow positive coming next year, and we'll be deploying more of that to debt reduction as well. I think all said, let's perform first, make sure the business is performing very well, use the funds on hand, and that should get us to where we want to be ultimately. We have a high degree of confidence in that, and then we'll take it from there. Does that help, Fadi?
Yeah, that's helpful. Thanks. Maybe one follow-up quickly on what is the base interest cost, financing cost, coming into this plan? Is it $760 million? I'm confused a little bit net-net. What is the base of interest cost that you're starting off with?
Yeah, the run rate cost, Fadi, would have been around $800 million, including the HPS facility, which of course we've paid off now. We only had that facility for half a year. The total interest expense in 2020 would have been less than that. Those are the two numbers for modeling purposes.
Okay, thank you.
Okay, thanks, Fadi.
Thanks, Fadi.
Thank you. Our following question is from Konark Gupta from Scotiabank. Please go ahead.
Thanks, good morning, everyone.
Good morning.
Morning. Maybe the first one for Éric or Jean-Christophe Gallagher, whoever wants to take it. On the Global 7500, actually, you guys mentioned about the unit cost reduction of 20% from 50th aircraft, which is almost today, to the 100th aircraft. Based on your production rate, it looks like you will touch the 100th delivery at some point in 2022. From that point onward, do you expect further unit cost reduction and further margin improvement for Global 7500? Are we looking at a stable margin with a stable revenue profile from that point on?
I would say, Konark, that we will have achieved the majority of the saving, where we're talking about another 20% reduction on unit cost between now and aircraft 100. Clearly, our company always looks at improving itself. There is always continuous improvement. We always try to find better way of doing the work and revisiting all the time our cost structure. There could be, I would say the majority of it will be happening between now and airplane 100, but there will be further incremental improvement after.
Great, Éric. Thank you. For Bart, maybe in terms of the CapEx, you laid out a flattish $200 million per year-ish or so for the next several years. First clarification, maybe can you help us if the $200 million is also applicable in 2025 guidance? Secondly, what kind of split are we looking at between maintenance and the growth CapEx you need for those expansion plans you have for the service centers and all that? Is the 2025 number for CapEx reflective of the new investment cycle on the product side, if any? When do you expect that new product cycle investment to begin, obviously, given the industry is pretty competitive?
Éric, do you want me to start or me?
Maybe, Konark, what I would say first is the answer is yes. We're planning to be in the zone of the $200 million between now and the end of our plan that we're presenting today. Clearly within that $200 million, there is completing the service center build that has not been completed, but the majority of it has already been spent. The other thing is, Bombardier has a long history of always improving our product, staying at the forefront of the technology, having the most competitive airplane, and part of that $200 million also, there's improvement to our product in the next five years. To answer your question, for 2025, yes, and in terms of continuation of improving product year-over-year, we will definitely use that envelope of $200 million to do that.
Konark, maybe if I could just add to Éric's comments for you. Refreshing of aircraft and continuing to improve them over time, I think some companies have seen significant investments having to be made from a CapEx point of view. We've recently come through two cycles with the Global 5500 and the Global 6500 both, and we know what those ones cost, those particular upgrades and updates cost. We have a high degree of confidence that further upgrades and updates will easily be accomplished within that $200 million plus or minus CapEx over the next five years.
That's great, Bart and Éric, maybe just to clarify to my question on that. It's a $200 million number, I understand, obviously, it's low right now, but many have the investment cycle coming up. What kind of magnitude do you look at as sort of the high watermark in any year for the CapEx? I mean, could it be $500 million? Could it be $1 billion dollar, depending on the business investments?
Beyond 2025? I think it somewhat depends on the approach we take to either future development programs or large and expanded refreshes on our platform. We're working very hard to de-risk our approach, as you know. Every time we do a new program, it's now today in the $ billions, whereas 20 years ago it was less than $1 billion. These are high capital costs. I don't think we have a line of sight on a high water mark, we'd say today, unless we came into a brand new program. But as I said, we're working very hard to de-risk that and use different approaches that will provide the ability for us to use far less of our balance sheet directly as we do new programs and upgrades. I don't know, Éric or J.C.?
I think if I may, Bart, and maybe JC if you want to add, clearly, Konark, the days of the OEM completely spending all the money to get an airplane into service five years later, I think are behind us. We're going to have to be disciplined, even in the second part of our plan for the next decade. If we have to do a complete program, we're going to have to rethink the business model. The business model will keep us in a band where we have much more capital discipline that we had before, potentially. We know today how much it costs to develop a new airplane. There'll be clearly partnership, there'll be a contribution from other people benefiting of the program.
This is something that we have time, because right now we are starting the next five years with a completely refreshed portfolio. That's why we can have that capital discipline investing in the aftermarket business, and continuing, again, as I said, have money to improve the product to keep them at the highest standard. In terms of a new program, we clearly don't expect anything before the next portion of the decade, but it will be a complete different business model, which much more conservative on using our own balance sheet.
Maybe, just to add on the aftermarket side. The structure we've adopted for those investments are long-term leases, 30-year leases, even beyond that. We actually don't own any of these new buildings that we're putting up. In terms of our cash usage going forward, there's some small investments in tooling and equipment, other investments in digital, but those are very small in the overall envelope.
That's great, fellas. Thank you so much, guys.
Thank you, Konark.
Thanks.
Thank you. The following question is from Robert Spingarn from Credit Suisse. Please go ahead.
Hi, good morning.
Good morning, Robert.
Thank you for the presentation. I don't know if you have the slides visible to you, and I think I'm looking at slide 24, which is the EBITDA growth. Bart, this 50% CAGR from 2020 to 2025, I wanted to ask you how linear that is. You touched on it a moment ago when talking about the front-ended nature of the improvement on the Global 7500. When we factor all this other stuff in, would you call it a fairly linear move from 10%-20%?
No, actually. It's much more front-end loaded. The vast majority will come by the end of 2023. For a couple of reasons. First, I highlighted earlier that 90% of the growth is really things that are within our control. We're well through our cost takeout. We're actually the pipeline of items that are already going to be baked in and delivered in short order here is already up to $325 of the $400 million. The learning curve on the Global 7500 will largely be in place by the end of 2023 as well. Building on the one part that will be more linear is the growth in our aftermarket business. There's a very clear strategy that JC's executing on, but the growth in that business for Bombardier going from $3.2 billion of demand to $4 billion of demand is quite steady over the five-year period.
That would be the one key contributor that would be quite linear. The rest largely comes by the end of 2023.
How have you factored in, if at all, pricing on Global 7500 before and after the G700 enter service? Which I guess is in some point in 2022.
JC?
I think as all assumptions in our plan right now, we've been extremely conservative on that one, too. We're going to continue to look at that as we move forward. We feel very confident in pricing stability on that platform, even with the oncoming competitors.
We-
Okay.
I'm sorry, Robert, just to add on that, we're going to have a very comfortable install base already as our competitor start to deliver their airplane. That airplane has performed quite significantly. There's no re-questioning about the Global 7500. You've heard a customer. This is the undisputable leader and king of the air right now, and we believe we're going to keep that position. The airplane is flying fast. You've seen some of the performance during the video earlier, so we feel very strong. Again, to what Bart and JC have mentioned, our plan is conservative, and we've been conservative on rate, we've been conservative on pricing, so the plan is achievable. If we have a bit of tailwind, as we mentioned earlier, we will have the possibility to do better.
Yeah, Robert, maybe if I could.
Okay, one more.
Sorry, if I could just add one last thing.
Sure.
We're actually sold out basically on the platform too through 2023. Aside from some aircraft that are coming back to us, a small number, which we'll be able to realize even better pricing on those aircraft. We have absolute certainty, literally, on the pricing, at least for the next.
Couple of years
couple of years.
Yeah, that's good visibility. Éric, as a final question, just wanted to ask you, as you think about the market expansion over the next few years at 25%, do you expect any shift in the ratio of fleet buyers versus individual buyers, and does it change by segment?
Yeah. I think it's an interesting dynamic right now. We've talked about the pandemic and the impact of the pandemic. We've clearly seen early sign in the pre-owned business. Our pre-owned inventory is going down. We see a lot of people going to fleet operator. Not everybody wants to have an airplane and his own airplane. There is a market and a lot of newcomer will also vote for that option. The good news here is Bombardier is extremely well-positioned with all our product, with the Challenger and the Global platform, with pretty much all fleet operator. Our airplane are so reliable, predictable. The cost of maintenance are low. That's one of the reason why we've been selected by the main operator around the world.
If that upside, and a lot of people are buying shares at the fleet operator, there will be clearly an impact on our business, a positive one. That's how we foresee that. Not everybody will buy his own jet, and it's a business model that some people will adapt, some other people will go for the fleet. We're fine. We're well positioned for both cases.
Okay. Thank you, everyone.
Thank you, Robert.
Thank you, Robert.
Thank you.
Thank you. Our following question is from Noah Poponak from Goldman Sachs. Please go ahead.
Morning, Noah.
Hi, good morning, everyone.
Good morning, Noah.
Morning.
Hey, actually, I wanted to follow up right on that last one from Rob really quickly. Could you just level set us on the exposure of each of Challenger and Global broadly to fleet versus individual person versus corporate flight department, just as we all think through the corporate flight department's been off, it's going to come back, but who knows how quickly as everyone's focused on cost. The new flyers that came to the market during the pandemic are individuals, largely. I would just love to get those exposures that you have on a sort of mixed basis so we can think through how you'll be exposed to those recoveries.
Okay. We are extremely well-positioned when I look at the fleet operator, I will call it clearly an opportunity. We've been right now with the main operator being a big share of their portfolio of airplane. Our airplane are also extremely well received by the customer base. It gives us the opportunity right now to continue to grow that. We have order. We also have a lot of options, that those operator can turn into an order. It could be a nice percentage of our backlog, call it 20%. It is significant. The potential is there. If there's an upside on their side, then we may see the fleet trying to have more airplane if the growth is there. Because some of the airplane that they were taking were there to replace older airplane, because they were replacing their fleet with our airplane.
There's also a potential for growth here that we could tap in as we are extremely well-positioned.
What % of Global and Challenger backlog is corporate flight departments?
I don't know the exact answer to that. I don't know if you know, JC.
No, I don't.
Maybe, Noah, we can get back to you on this one. I don't want to quote a number here.
Yeah. I can follow up on that.
It's a big part, but it also gives us upside on both sides. We do have a fairly sizable portion of our backlog, which is fleet operator.
Yeah, Noah.
Okay.
Noah, interesting stats that come to mind. From publicly available sources, if you look at the markets in which we compete, and you look at deliveries over the last five years, Bombardier has had about 43% market share with fleet operators, right? We've been extremely successful. NetJets, VistaJet, Flexjet, and it's one of the key statistics that comes to mind as you're asking your question.
Yeah.
Yeah, they're all fabulous partners of ours, and we very much enjoy the relationships with them.
Got it. On the Global 7500, I know you've spoken here to the position of being sold out through 2023. I don't know if you'd be willing to just share where the unit backlog stands at this point, but more broadly, I would love to get your thoughts on whether there's growth or not in the delivery profile. We've been all looking at this 35-40 unit number for a little while. Sometimes new airplanes have a higher number early because of the early demand, and then that fades, and sometimes it's lower because it's new, and then there's a lot of growth over time. I guess I'm just sort of wondering how we should be thinking on a longer-term basis. Should we just hang around the 35-40 for a long time?
Does that actually need to fade at some point, or do you think there's growth in that number over time?
I think, if I may, I think we do believe that 35 to 40 is the right number for now. I'm talking just here specifically about the Global 7500, of course.
Yeah.
We'll see. We'll assess. The market is reacting extremely positively. At some point, we like the fact that we have amazing backlog. Having too small of a backlog is a problem. Having too long of a backlog can be a problem also, so we need to find the right place here. Yes, there could be upside. Today, we believe that 35 to 40 is the number we're going to be working with.
I assume the 2025 targets have the Globals all fairly flat from here and then a recovery in the Challengers, in that $1 billion of OE delivery revenue growth you cited.
The share is roughly 60/40 between Globals and Challengers as we go forward, or 55/45, in that range, in terms of the percentage of Global deliveries versus Challenger deliveries, if that can help you.
Yeah.
Okay. Just one last one for Bart. If I look at the debt maturity schedule per year, post using the Alstom proceeds towards a lot of what's due in 2021 and 2022, there's still a number due in 2023, 2024, 2025 that's larger than what you're talking about for free cash flow. Can you speak to us about how you are looking at pushing those out, refinancing those? When can you do that? Can pricing be more attractive or less attractive compared to current, if you do that?
Yeah, great question, Noah. Just to set up some numbers for you, we've got about $3 billion of available cash flow remaining from the Alstom proceeds, plus a little bit of excess cash that we have on the balance sheet to put to work, and we've got about $4.7 billion, I think it is, of near-term debt maturity. We do have a bit of a gap. The debt capital market today, as you know, is very robust in all parts of the curve. In our looking at it, we know that it's open for us if we wanted to do some refinancing. That certainly will be something we'll be looking at, and so long as it makes the right economic sense relative to the trade-off of being able to push maturities out, it's something we'll be looking towards as well.
We're also looking at opportunities to free up cash on our balance sheet. We've been very clear historically that to run this business properly, and given the inter-quarter use of cash that we have regularly, that we need about $1.5 billion plus, call it between $1.5 billion and $2 billion roughly, of cash on balance sheet to give us a really, really good cushion and absorb normal inter-quarter variability on cash flows. With the repayment of the HPS facility, we freed up our collateral that was supporting that facility. One of the other things that we're looking at is perhaps replacing that facility, so long as that makes good economic sense, with something that'll give us more financial flexibility, whether that's a revolver or a combination of facilities that will allow us to free up some additional cash from the balance sheet and put it towards debt repayment.
That's the plans now.
I think Bart said it in his presentation also, we are clearly focused on our maturities up to January 2023 right now, which if we can address that, this will clear the runway, because the next one after that is December 2024, which brings us almost in 2025. That's one of our strategy, is to make sure that we do have that piece addressed. Yes, we have $3.6 roughly available. We may look for another $1 billion somehow to achieve what we're doing here in terms of creating a runway. That $1 billion can come from different source, which we are looking at right now. It could be using securities, revolvers. There's all kind of option that I would say we will consider in the next coming weeks.
Thanks, Noah.
Okay.
Thanks, Noah.
Thanks so much.
Thank you. Our following question is from Yilma Abebe from JP Morgan. Please go ahead.
Okay, thank you. Good morning. My first question is clarification on the question that was just answered. In terms of, I guess, minimum liquidity the company would need as you begin 2022 after you reduce new debt, what is that level of normalized liquidity that the company would need, and how does this, the credit facility you described fit into that?
Yeah, I can maybe. Just in simple terms, in a year where we're looking at in 2021 with cash burn of something better than $500 million, we've targeted $1.5 billion-$2 billion of liquidity as an appropriate number for ourselves. That would be too high, obviously once we get into a free cash flow positive situation. As we move through 2022, where we start being free cash flow positive and get to 2025, we believe our liquidity needs should be lower. The one offset to that might be if we have a little bit higher working capital needs. We'll have to see how that balances out over time. By delivering on the free cash flow that the business is planning on and we're working towards, we should be able to free up incremental cash off the balance sheet to help us repay more debt.
Absolutely.
Hopefully that helps, Yilma.
It does. It does. I guess my second question is related to the aftermarket book of business. You're targeting about $2 billion of revenue by 2025. Can you give us a little bit of color around the margin profile of that business once you get to that $2 billion? What's the EBITDA margin look like? What is the free cash flow in a profile of that business?
I'll start by answering. Obviously it's our highest margin business that we have in Bombardier's portfolio. We have not disclosed the exact numbers, but we're already operating today at a very, very good margin on this business. What we see going forward is we're going to target close to double digit growth in revenues as we move forward, and slightly better, in terms of margin improvement as we go forward. That's explained by many different things, but largely because we're able to push our current infrastructure and distribution network, and put more volume through it. We're going to see some economies of scale as we move forward. What we've achieved so far, if you look at our slides and back in the past, is exactly that phenomenon.
We've been growing at about 13% per annum on average in the last five years on revenues, but we've achieved close to 20% year-over-year growth on the profitability of the business. I think we're going to see a slightly better year-over-year growth on margin than you're going to see on revenues as we move forward.
How about on the free cash flow side? What kind of working capital should we expect at that more normalized $2 billion of revenue?
The cash will follow the EBITDA of that business almost one to one as we move forward.
Thank you. That's all I had.
Okay. Thank you, Yilma.
Thank you. As a reminder, please limit yourself to one question and a quick follow-up. Our next question is from Walter Spracklin from RBC Capital Markets. Please go ahead.
Thanks very much. Good morning, everyone. I'd like to come back to some of the upside opportunity if it should develop. You talked a bit about how COVID-19 is resulting in a spike in demand. If it were to stay high, and you mentioned the possibility that it would, what confidence do you have that it could stay high, and what metrics will you be watching? If it does, how much flexibility do you have, say, on the margin to increase production for particularly the Global 7500? Would that come with higher CapEx if you're to do that?
I may start answering. Thanks. Good morning, Walter. Clearly the upside right now potential is with the newcomer that I explained earlier with one of the COVID impact that we have. We see that right now, and I think JC quotes some number in terms of what percent of newcomer we had in the past, how many we had this year, clearly there is an upside. How sustainable is it going to be? Is it going to last a year or two, or maybe that's going to be increasing quite significantly? There's also another indicator. We talked earlier about the number of billionaire in the world that has grown by 10% a year.
We haven't tapped into this yet, and I think the pandemic will accelerate some of these guys to adopt business jet as a mean to travel. All this being equal, clearly we've been conservative in our rate. You see that our rate are slightly growing between now and 2025, and we're in a year where we just got out of a pandemic, we readjusted the rate. We're conservative moving forward. We will see how the market behave in the next nine month, 12 months, and how our backlog is growing. If the backlog grows enough to justify line rate increase, we will do that because as I said earlier, having too much backlog could become a problem, so we need to find the right size. We need to see a couple of quarter of momentum continuing with newcomer coming in.
I think we'll have a clear sign that there's more and more adopter, and we'll see also the same sign with the fleet operator. We're monitoring the leading indicator to your question are always pre-owned inventory is always one that we watch.
Yeah.
Also I would say the fleet operator, the number of newcomer going to their business is another one.
Maybe-
J.C., you want to add?
No, I think you said it right. I think the pre-owned indicator is one of the most important ones to look at, and we're headed into historical lows as we speak. There was very, very strong demand for pre-owned aircraft in Q4, which created a big drop in available inventory right now in the marketplace. No, I think Éric said it all. When we look at the last five years in business aviation, in the markets where we compete, we've seen yearly deliveries of this industry between 600 and 500. It's been hovering in that level for many, many years. We're at the bottom of the cycle now at 480 in 2020 for the industry.
What we've baked in in our plan, in our conservative assumption is going back to something like 570 by 2025, which is completely in the normal band of what we would see in business aviation. I think to Éric's point, with further adoption, continuing growth in terms of wealth creation, there is a possibility that we're going to leave that band, that traditional band of yearly deliveries as an industry and really move to something that's even higher than that. Again, the plan we've built hasn't taken that into consideration.
Okay, thank you. My follow-up here is on the interest and debt reduction. You addressed, Bart, a few other opportunities that you could have in reducing debt. I think you also, during your prepared remarks, looked at some potential proceeds from reducing your footprint. My question is whether you have been engaged with other parties, particular government, in terms of providing some backstop financing as well, again, to get that rate lower, or would you entertain, as did in prior years, JVs or having third parties partner up with you to reduce some of that burden?
Yeah, Walter, I'll maybe take the first part of that, and I'll turn it over to Éric and maybe JC to tackle the strategic part of the joint ventures and whatnot. We're certainly open to other means in order to either bring our interest costs down or facilitate aircraft sales. We have worked with the likes of EDC and CCC in the past to try and find ways to facilitate our programs and make the sale of our aircraft even that more attractive to our customers and our partners. We're always open to those things. We're doing some things ourselves in terms of putting in place facilities like surety bonds or perhaps even letters of credit, if they're economic, to help facilitate sales for us as well. We're looking at all of those things.
In terms of the debt repayment, I mentioned the biggest driver there, or two biggest drivers, I think, over the longer term will be a positive growth in our free cash flows. As Éric highlighted in his comments, debt repayment is going to be a priority for us over the next five-year period. As we see more cash available, and with a low and steady CapEx rate, we'll obviously look to put that towards debt repayment. We have a large amount of cash, excess cash I'll call it, on the balance sheet that today we need for liquidity. If we were able to replace that liquidity with something at a reasonable cost, we could perhaps free incremental cash up and use that to pay down more of our debt. That's something we're working on right now.
We're active in the markets and speaking with potential partners on that front, and more to come.
You want to start? Yeah. You want to go? Go ahead.
No, no, please.
Okay. JV side, I think right now we could consider on the long run for new program JVs and things like that. I think right now it's not in our card, I would say, in the short term. We're building right now a more resilient business to reach full potential. That's what we're focusing on. We have a great portfolio ahead of us. We are focused right now on margin. We are focused on deleveraging the balance sheet, and we're going to look at the different instruments here, and I think Bart already mentioned some of those. Everything is on the table, and we'll definitely make sure that we keep our objective in mind, which is optimizing our return and optimizing our free cash flow generation.
That's great. Thank you very much.
Thanks, Walter.
Thanks, Walter.
Thank you. Our following question is from Myles Walton from UBS. Please go ahead.
Thanks. Good morning. I was wondering if maybe Bart, you could just give us a little bit more color on the walk to break-even cash flow in 2022. It sounds like RVGs net CapEx aren't really a help. It looks like from your EBITDA chart, maybe $200 million from the cost reduction efforts and the 7500. It didn't sound like from your answer to David's question that working capital was much of a help. Maybe just flesh out what I'm missing in terms of that walk to the $500 million delta year-over-year from 2021 into 2022.
Thanks, Myles. You're right. CapEx won't be a help, when we're not planning on it. We expect CapEx to be quite steady. We do expect taxes to be neutral. We do have very significant cash tax pools that'll be supportive of offsetting any income taxes that we have to pay for a number of years to come. Those we expect to be quite neutral. Most of the non-recurring items will be behind us. RVG, we will still have in 2022 and 2023, call it a little over $100 million of the $200 million of non-recurring items will not be with us in 2022. We have the benefit of the Global 7500 program, it's moving into the profitability part of its cycle. That is $200 million as well.
When we talk about the cost reduction activities that, as I said earlier and Éric highlighted earlier as well, we've already baked in $325 million of that on our way to $400 million by 2023 full run rate. We'll get somewhere in the order of $150 million plus benefit from that in the year. Of course, there's obviously the interest expense reduction. We believe we have a real clear line of sight to becoming cash flow positive in 2022 when you add those elements together.
Okay.
Okay.
Maybe one other one on aftermarket, JC, you laid out sort of the strategy there, but I'm just curious, do you think that you get back to full Bombardier fleet utilization in 2022? If so, the CAGR of expansion from 2022 to 2025 from a revenue perspective looks significantly higher than what was realized for the pre-COVID five-year strategy. Maybe just flesh that out, the confidence there.
Yeah. No, very good question, Myles. It's going to depend on flight hours, but we'd like to be back to 2019 levels this year. Right now, the fleet's operating at about 81% of 2019 flight hours, we're going to continue watching this. This depends on when the international borders will reopen. Kind of what we see right now is there's a lot of domestic travel in the United States that's very healthy for us in terms of flying. What we're missing right now are long-range Global aircraft flights, that's a good driver for revenues as we move forward. What I'm seeing right now is a recovery this year to 100% of 2019 level. We'll have our revenues realigned to that, we'll go from there.
I think what you're going to see more directly at the heart of your question is, we have a lot of square footage that's coming in the next 12 months. From Singapore just now, Miami and Biggin Hill early next year, Australia in the same timeframe. We know that we're poised to have a spike in terms of our ability to grow. I want to come back on the curve. I haven't changed the plan, even with the COVID dip. Obviously, it's leading to short-term challenges where we have to maneuver to these lower flight hours, but I really want to come back on that trajectory as fast as possible. The good news is that we've been building that square footage, and it's going to be right there when the world recovers fully. That's kind of how I feel about where we're at right now, Myles.
Okay. Thanks.
Thanks, Myles.
Thank you. Our following question is from Cameron Doerksen from National Bank Financial. Please go ahead.
Thanks. Good morning. Just one question from me, and it's just on the, I guess, the transition of the Global production line to the new facility. Obviously, by 2025, that'll all be complete, but can you talk a bit about the risks around margins and cash flow in the sort of intervening period here as that transition takes place?
There is no real risk for us, Cameron, because as we're moving the Global 5000 back here, the facility has been producing in the past, the Global 5000. We know exactly our people are still around, so we don't see any risk and any impact of those transition between the sites. It's already in our plan, and it's going to be very minimal.
Okay. You won't need to have to build up any inventory ahead of a change in the production line or anything like that?
Not at all.
Okay. No, that was my question.
Thank you.
Thanks very much.
Thank you, sir.
Thank you, Cameron.
Thank you. Following question is from Chris Wong from Barclays. Please go ahead.
Hey, thanks. I just want to follow up on the aftermarket. I mean, you talk about a lot of capacity coming online for you, that's positive. I'm just wondering, what's the competitive landscape look like for you on the MRO side? Who's competing with you at this point, how easy it is for you to take some of those share back?
Thank you, Chris. Absolutely. Great question. It's a changing landscape right now. I think what you saw over the last few years is many of the airframe OEMs have had the same reflex to go back into their own aftermarket. We've seen Bombardier's announcements and going after organic growth, and we've seen some of our competitors make acquisitions to significantly increase their own footprint. What's happening right now is you can really feel every OEM is taking their own aftermarket back, which is impacting third parties as we speak. Consolidation obviously is going on and there will be more. It's very clear that this is all a changing landscape right in front of our eyes. Now, that said, none of us, in terms of airframe OEMs, have the capability to cover the entire market.
There will be a healthy market for those third parties that are able to provide that level of customer satisfaction, and that level of know-how on those manufacturers' aircraft. You have a very well-known organizations, Duncan Aviation is one of those in the United States, that will continue to operate in that third party zone between the different OEMs. To your question, it's a changing landscape. I think we will see less of the smaller players, consolidation of many third party MROs to go through this transition that we're living through in the aftermarket of business aviation right now.
Got it. Thanks. That's helpful. I just want to kind of crystallize the near term, the 2021, going on to the 2022 numbers. The cost save is pretty clear to me, $100 million in 2021 and $150 million in 2022. In terms of this learning curve that you're talking about on the Global 7500, it looks like somewhere in the $200 million or $300 million in 2021, and a sort of similar amount of improvement in 2022. Is that the right read in the near term to your front-loaded comment?
Yeah, Chris, you've got those numbers right. It's about $200 million in each of 2022 and 2023 in terms of-
in terms of the benefit from the Global 7500. There will be some beyond that as well. It's actually greater than $400 million in total. The further gains, obviously there's a reduction in them per year going forward.
Got it.
as Éric had mentioned, I mean, the company and our operations is constantly focused on improving the reliability and the productivity of our production lines and workforce. Incremental gains year over year are definitely possible and likely as we move beyond the full learning curve. We're excited about that as well, but we haven't baked any of that into our outlook or projections currently.
Got it. Circling back on the aftermarket, can you talk about the cadence of the revenue growth from the $1.2 billion-$2 billion, what is the margin profile going to look like?
Yeah. As I mentioned, the market is growing at about 4% per year. What you see in the material we've given you today is that we'll be growing revenues in the range of 10%, year after year. We're going after share above and beyond what we're going to see in terms of the growth of the market. Now, the growth of that market, as I've mentioned before, the fleet is growing, the fleet is aging. There's a lot of large airplanes that have been delivered in the last 10 years that are coming due to major inspections. There's a 120-month inspection on the Globals. A lot of these airplanes will go through those inspections in the next few years. That's one of the big drivers of that growing market as we move forward. The second part of your question, I think I touched on before.
I think we're going to see profitability grow faster than revenues within a couple of percentage points, but that's what the past has shown us in terms of maximizing our footprint and our infrastructure and our distribution network. And I expect to see the same kind of higher year-over-year growth on profitability than what we see on revenues as we move forward.
And then at the end of-
I'm sorry, Chris.
Go ahead.
I was just going to add, what's amazing for us right now is we have 5000 airplane as an installed base, and this is what JC and his team are going to tap in. It was a question of geography right now to be present in the right market and making sure we're there and available. 5000 airplane is a lot of airplane. As an OEM, we know to JC's point, when an airplane will be ready for a major inspection, a five-year inspection, 10-year inspection. We will be aggressive at pursuing those market
I think right now, to your point, JC, it's a question of timing. We're still in the pandemic. It's going to be how fast the vaccine kicks in and how fast the borders are reopening. Right now, you've seen the slide earlier on the Global 7500. You look at the 7500 right now, the flights are about a duration of two hours, 2.5 hours on average, which is very short, but people are flying either within the U.S. or within Europe. Imagine when international flights and borders will reopen, everybody's going to start reflying again, and of course, we're going to see that impacting positively our aftermarket business right away.
Thanks, Éric. I think definitely a bigger opportunity for you, especially competitor to competitor. One of the lower hanging fruit, in my view. Thanks for those. Lastly, just on debt management, it seems like you're suggesting potential, like a two-step, in terms of paying down debt, with the proceeds and the cash balance that you have. You mentioned like a $3 billion, give or take, number that you have, and also the potential to kind of raise secured debt, with the collateral just freed up from the HPS deal. Just wondering, in timing-wise, you mentioned, towards mid-year this year. What are you targeting first and also is it by the end of the mid-year this year we should see any maturity that's within three years to be cleared out?
Yeah, Chris, a great question. We're certainly timing to have all of the cash deployed by mid-year. That includes the funds that are currently tied up on the balance sheet. We do have 11.5 million Alstom shares that are in a short-term lockup. Those come out of lockup in May. That forms part of the cash. We do have a targeted use for those funds because those shares are traded in euros, and we have a EUR 400 million euro bond, or just over EUR 400 million, that's maturing also in May. Those are really spoken for. By mid-year, we expect to fully deploy the cash. We do want to be, patient is not the right word, but somewhat opportunistic in the approach we use to deploy that cash and what comes first in terms of cadence.
I can't really get into those details yet because we haven't finalized them, but hopefully, that helps you from a timing point of view. The two key methodologies for putting cash to work, obviously, are repayment of bonds, and as well, freeing up more cash off the balance sheet with a, call it, a securitized facility or facilities, or collateral-backed facility or facilities. That'll give us incremental cash. Which of those will come first, I can't really tell you right at this second. More to come and you'll see the announcements as they happen. Okay?
Got it. We're looking forward to that. Thank you.
Appreciate it. Thank you, Chris.
Thanks.
Thank you. Our following question is from Jean-François Lavoie with Desjardins Capital Markets. Please go ahead.
Thank you very much. Good morning. You mentioned in your prepared remarks the potential to go after missionized aircraft. I was just wondering if you could provide additional details on the contribution of these types of aircraft today in your business and what's the size of the market? Please. Thank you.
I can start and maybe, JC.
Yeah
You can carry on after. [Non-English content] , Jean-François, [Non-English content] . It is clearly a market potential driver for us in terms of number of airplane. Usually the margin also because we usually sell a green airplane, install equipment on it, which we do have also, of course, a sales and profit. We like that business. Our airplane actually, for the reason you've seen earlier because of their performance, the wide cabin, the reliability is also a differentiator. We have already a lot of airplane missionized in the world, either ambulance, rescue mission, communication system on it, and I'm sure you've seen some of those. We've been approached in the last year or so to what we call the mission house. The mission house are usually the one that do this work or work with us on this.
The Global and the Challenger are both extremely popular with the mission house right now. You've seen some announcement recently. We've been able also to capture backlog on this, and we do foresee that putting also our engineering capability that is unique at Bombardier because, of course, we know our product better than anyone. We could definitely also contribute to making more attractive our product. That's the strategy. We haven't set a goal precisely in terms of percentage of contribution, but let me say it this way, it's going to be a bigger piece than what it is today for sure in the next five years.
Okay, great. In the beginning, you mentioned that you have been approached by potential MROs, do you need to invest? You talked about the engineering capabilities, is it through partnership or maybe you can invest in your products to go after the market differently? Just how you intend to grow in that segment. Thanks.
Good point. The beauty of this contract is they are everyone specialized. We take one of our Global that is off the line, the regular assembly line, and we do modify the airplane. The contract cover all the costs usually, so we don't need any development program because it's very specific. If we sign a contract with a mission house and they want us to install and modify the shape of the airplane for all kind of reason, because they have equipment to install on it, then we'll do all the testing. Those testing and costs related to that, they will be covered by a contract. No investment needed on our part. I hope I answered your question, Jean-François. He might be on mute.
He might be on mute.
Yeah, Jean-François, we cannot hear you.
We have now our last question from Kevin Chiang from CIBC. Please go ahead.
Thanks for squeezing me in here. Maybe just one question, maybe to you, Bart Demosky. If I look at the 2025 objective, it looks like you'll convert about 50% of cash flow from operations from EBITDA. I appreciate 2025 is not the end of your journey here, but if I look at some other pure-play manufacturers out there, like in the autos or heavy equipment, they can get up to 75%-100% conversion. Do you see that as an eventual realistic target for a pure-play business jet OEM, or are there any reasons why that makes it more difficult for Bombardier here?
Yeah. It's a good question, Kevin. I think the first thing I would say is that clearly, just given all the comments we've made today and the additional opportunities we have in front of us, that we've been conservative on our outlook for free cash flow by 2025. We think there's upside to that if we hit our EBITDA goals. We're actually quite constructive that our conversion rate will be higher than what you're seeing in the projections. We do want to stay prudent at this stage. We're just launching ourselves today as a pure play business aviation company. There's a lot of things in flight, to borrow on probably a bad pun, and things that we're working on. Our focus is really to execute first, and then really deliver the potential. As I say, I believe there's upside to it.
We have a high confidence in the plan that we have now and look forward to achieving that upside. I think as I maybe mentioned earlier, that'll be a very first-class problem for us.
That's helpful. I appreciate the call, everybody. Thank you.
Thanks, Kevin.
Thank you. This concludes the Q&A session. I will now hand it over to Éric Martel for closing remarks.
First of all, I want to thank you for listening to the Investor Day today. I hope that we've laid out all the information. We wanted to be transparent with you. We wanted to let you know what the game plan is as we are becoming now a pure play business. We are excited about the plan. I have a lot of experience on my team, years in our industry. We know that we have a real plan to win. We have an amazing product portfolio capability ahead of us, fully refreshed. We have very capable and dedicated workforce here. Our employee are excited with where we're going to be going. We have a real possibility with the market that is ahead of us. Yes, we've said it many time, we are in a transition year.
We have been conservative on our plan. There is a real potential upside. We are excited about growing our aftermarket business. At the same time, a lot of the things we committed today, we are far advanced. We know exactly where we are, so we are becoming more and more predictable. We want to offer to you a more resilient business also, and clearly, reach to our full potential. A more diversified portfolio, as we said, our revenue will be more balanced with a bigger piece going to aftermarket, which is a more resilient market. We are going to be focused. We are going to be focused on the Challenger and the Global platform, which compete in the medium and large segment, which are, as we said earlier, equal to 90% of the market in business jets. We are competing within 90%.
We are excited about it. We think we're well-positioned. We're going to be extremely disciplined also, and we're going to be deploying our capital very strategically, of course, having in mind reducing our debt. We are de-risking our business model. We are going to be focused, and thanks for joining us this morning. Thank you.