Hawker Beechcraft Chairman Bill Boisture provided some insights at the National Business Aviation Association annual convention in Orlando, Fla., about why the proposed acquisition by China’s Superior Aviation Beijing did not happen.
Boisture declared the proposed agreement complex, with cultural and language barriers and the need for approval from the U.S. and Chinese governments. As a result of the failure to agree, the company plans to emerge from bankruptcy protection as Beechcraft Corp. in early 2013.
Owned by four well-funded “big lenders,” the company plans to focus exclusively on propeller-driven airplanes. It will sell or shutter its Hawker line of jets in the next few months. Revised documents reflecting the change have already been filed with the courts. A judge will hear the plan on Nov. 15. At that point, those with an interest in the case will have a chance to comment until Jan. 22. Another hearing on Jan. 31 is expected to complete the process and allow the new Beechcraft Corp. to emerge shortly thereafter.
In the process, the company will shed $2.5 billion in debt and enter into new supplier contracts that reflect the elimination of the jet line. It also will have a new agreement for employee pension plan funding. As Executive Vice President Shawn Vick put it, “We will be a lean entrepreneurial company with a five-year product development plan.”
While the plan is mostly positive for those flying propeller-driven Beech airplanes, Boisture apologized to some of their Hawker jet customers who will not fare so well. The company is asking the court to allow it to cease warranty coverage for the Hawker 4000 and Premier IA jets, which combined amount to about 150 airplanes out of 36,000 Hawker and Beech products in the field. “We are truly sorry to have to disappoint our customers with this decision,” Boisture said. Warranty coverage will continue for the 900XP, 700, and 400XP products. The company will continue to offer service and maintenance support for all the jets until a new company can be found to take over those services.
Meanwhile, the Hawker line is for sale and the company is in discussions with several entities for possible acquisition for either the entire line and its type certificates to continue production; or to a company that only wants the TCs to continue support; or to a group of customers who want the TCs in order to continue support of the airplanes, such as happened when customers bought the assets of Eclipse Aviation out of bankruptcy.
Boisture credited employees with continuing to maintain high productivity, noting that the AT-6 light attack airplane is in low-rate production but is being produced more efficiently than ever before. “The untold story is about the people who have maintained their focus on quality, safety, and customers,” he said.