In May 2012 it entered into -Chapter 11 bankruptcy with the intent to liquidate the debt and emerge whole. A number of bidders emerged, and by July the company announced it had entered into an “exclusivity agreement” with a Chinese-controlled company, Superior Aviation Beijing, for the potential sale of HBC’s assets, excluding defense businesses, to Superior for $1.79 billion.
The sale, as you probably know, did not go as planned. In October, talks collapsed, and shortly thereafter HBC announced its intentions to emerge as a stand-alone company. A couple of weeks later, it filed the details of that plan, which gave more than 80 percent control to four secured creditors, Angelo, Gordon and Co.; Centerbridge Partners; Sankaty -Advisors; and Capital Research & Management. As we reported online shortly after the filing, the rest of the equity went to creditors. Goldman Sachs and Onex Capital Partners, which purchased HBC in a leveraged buyout just before the market tumble, would have no further involvement.
The new plan included a new name, simply Beechcraft Corp., and a pared-down lineup that would jettison the company’s jet portfolio, which included the light Premier 1A and Hawker 400 (formerly the Beechjet and, before that, the -Mitsubishi -Diamond Jet), the super-midsize Hawker 4000 (nee Horizon) and the midsize Hawker 900XP.
The fate of all of those airplanes is in the wind. There are thousands of still very active Hawkers and Beechjets in the fleet, making them attractive to a company looking not to restart production but simply to build spare parts and provide service. Much less attractive for this are the Premier 1A and Hawker 4000, which together represent relatively few airplanes.
The sad news, delivered solemnly by HBC Chairman Bill Boisture at an opening day press conference at the NBAA convention, was that the company was voiding the Support Plus service contracts for a total of 150 Premier 1A aircraft and Hawker 4000s. While owners will still be able to find service for their 1As and 4000s, the move will likely reduce the value of those airplanes and force owners to pay for maintenance and repairs out of pocket.
The decision to cancel the warranties on the two airplanes was made, said Boisture, with great reluctance. “We are truly sorry to have disappointed our customers with this decision,” Boisture told reporters at the event. Disappointment, however, is likely to be the least of customers’ concerns. It’s a terrible blow to those owners, though Boisture did point out it is likely the manufacturers of the aircraft’s engines and avionics would honor warranties for those systems.
Sadly, there’s more pain and suffering associated with the transition from Hawker Beechcraft to Beechcraft. Recently, the company told hundreds of its workers at Hawker Beechcraft Service facilities in San Antonio, Texas, Little Rock, Arkansas, and Mesa, -Arizona, that they are out of work. HBC plans to close all three facilities as it streamlines its services offerings into fewer existing locations.
One area it doesn’t plan to abandon is the refurbishment business. It currently offers two products, the Hawker 400XPR, a re-engined and refurbished Beechjet/Hawker 400, and the Hawker 800XPR, a refurbishment program for the midsize Hawker jets. The company also announced a Beechcraft Bonanza Xtra refurbishment program through its factory-owned services network (the same that is losing the three aforementioned facilities). The Bonanza program would install new Garmin avionics, D’Shannon tip tanks and new interior, glass and paint on eligible 36-series Bonanzas.