July 24, 2013
Beechcraft is weighing bids for the sale or sales of its Hawker 4000 and Premier aircraft programs, along with tooling and associated facilities, as the reshaped company looks to downsize its footprint and focus on its core lines of businesses.
The company “got interest in all” bids on July 2 and is “now negotiating for the sale of each of those assets” for the type certificates, along with associated spare parts, tooling and facilities, and Beechcraft hopes to tie up a sale by the end of the year, Beechcraft CEO Bill Boisture said during a roundtable with Aviation Week editors.
In addition to selling the airplane programs themselves, Beechcraft is selling the associated paint and completions plant in Little Rock, Ark. Beechcraft has also consolidated its pistons and turboprops production into a single facility in Wichita, closing the pistons plant. That facility, Boisture says, is on its way to becoming a big box store. Other plans include efforts to sell its composites plant (Plant 3) in Wichita, along with the associated technologies. He said the sale of Plant 3 and property at the south end of the Beechcraft campus will reduce its so-called “square mile” on Wichita’s east side by about 20%.
Beechcraft has also worked to “rationalize” its service network, including closing and/or selling its Mesa, Ariz., San Antonio and Little Rock facilities.
The decision to sell off the business-jet and composites-technology assets – after failing to find profitability in that market sector over the past three decades through three different aircraft programs – will enable Beechcraft to become a much simpler company that does not have to divert resources to supporting them, which Boisture says have “mediocre reliability, maintainability, operability, etc. – all the - ilities.”
As for its existing service centers, Beechcraft is maneuvering to build up the business supporting its own types, including the Hawker 125 and Hawker/Beechjet 400 families, for which it is retaining the type certificates. The company is also establishing “centers of excellence” at its facilities working on the XPR upgrade programs for the Hawker 800 and Beechjet/Hawker 400.
The company has a number of bidders for the programs and facilities, Boisture says, but he would not predict how the sale would proceed. The company has received interest from three categories of bidders – those who are seeking to purchase of all of the assets, those who want groups of the assets and others just interested in the pieces.
He envisions purchasers of the Hawker 4000 and Premier programs would establish a support company similar to Sabreliner. Their combined fleet numbers about 400, with the Hawker 4000 accounting for 73 of them.” He is more skeptical about the likelihood those aircraft would return to production. Such an effort would take four to five years and require an investment of $200-300 million before any updates to the aircraft, he says. “Unless there was a strategic national [interest], you probably wouldn’t undertake it,” he adds. While he concedes there has been some international interest in the programs, he also notes that such transactions can be complex, and Beechcraft is hoping to complete a sale before moving into 2014.
Boisture says the planned sales of the programs and facilities will only have a financial upside for Beechcraft, since the company, which emerged from bankruptcy in February, did not account for the programs as material assets on its balance sheet.