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Enstrom closes up shop

Despite many owners and an ever-fluctuating business environment, Enstrom Helicopter Corp. declared Chapter 7 liquidation proceedings and closed its doors last week for the first time in its more than 60-year history. Although a focus on foreign fleet sales hurt its business during the coronavirus pandemic, the root cause no doubt rests with Enstrom’s most recent owner—the Chongqing General Aviation Industry Group (CGAG).

Enstrom Helicopter Corp. abruptly ceased operations pending the outcome of Chapter 7 bankruptcy proceedings. Photo by Chris Rose.

Makers of the F–28 and 280 Shark piston models and 480 turbine single-engine model, Enstrom has produced more than 1,300 helicopters since its humble beginnings in founder Rudy Enstrom’s garage in the late 1950s. In recent years the bulk of sales were to foreign military and public safety outfits pleased with the predictable flight characteristics, long production history, and value compared to larger competitors. In December 2012, CGAG purchased Enstrom, but never seemed to have plans to grow the business. “They bought the company but never really invested in the company,” former head of sales and marketing Dennis Martin said.

For a time it looked from the outside as though Enstrom was going through something of a resurgence, but Martin said factory expansion and new product development was all debt-funded, with the promise that CGAG would pay the debt when it came due. “Unfortunately, when it came time to repay those debts they were just unwilling to do so. They decided that it was better to close the company,” Martin said.

Thankfully for owners and potential future buyers, there is significant value left in supporting the existing fleet. Martin said that although new sales were difficult because of the pandemic, parts sales were still going strong. Enstrom sold between $3 million and $4 million worth of parts last year, and a few million were slated already for this year. “The company was viable at some level,” he said.

Potential suitors have come calling, but patience will be required. Martin said the process must move through the bankruptcy court before a new owner can rehire staff and start filling orders. How long that will take is anyone’s guess.

In the meantime, he suggests owners turn to service centers for their parts needs.

Ian J. Twombly

Ian J. Twombly

Ian J. Twombly is senior content producer for AOPA Media.
Topics: Financial

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