Burdened by an enormous debt load and continuing weakness in the business jet market, Hawker Beechcraft last Friday reported losses of $632.8 million in 2011, more than double what the company lost in 2010 and the latest sign that it is on a rapid path toward bankruptcy.
Revenue at Hawker Beechcraft last year reached $2.44 billion, off significantly from sales of $2.8 billion in 2010, also a weak year. The manufacturer said it delivered 291 airplanes last year compared with 318 the year before.
Hawker Beech’s woes are tied as much to weakened aircraft demand as they are to a crushing debt load that is making it nearly impossible for the company to bounce back. Hawker Beechcraft’s debt totaled $2.33 billion on Dec. 31, a sum that does not include additional funds totaling nearly $125 million that the company borrowed last month to keep its factories open. The situation, said Hawker Beech CEO Steve Miller, “reflects the combined effect of the prolonged weakness in our market that has continued to affect our business and the heavy debt burden the company has operated under since 2007.”
In its delayed SEC filing on Friday, Hawker Beech conceded that its “substantial indebtedness” could mean it may not be able to satisfy its obligations on its notes, obtain additional financing, or pursue new business opportunities.
But despite the dire warning and rumors that a bankruptcy filing is imminent, the company insists a “path forward” still exists.
“Hawker Beechcraft continues to work closely with our lenders to restructure the company’s balance sheet, and to do so as quickly as possible,” Miller said in a statement. “In the coming weeks, we expect to decide on a path forward for Hawker Beechcraft that will include a plan that will put the company on firm financial footing and better position Hawker Beechcraft for the future.”