Hawker Beechcraft chief executive Bill Boisture says the down economy, exacerbated by financing difficulties and recent negative publicity on business aviation, will force the company to take "significant work actions" in the coming weeks on top of the 25% reduction in workforce already taken since October 2008.
In its second quarter earnings call with analysts, the company reported delivering 78 aircraft, consisting of 24 business jets, 41 turboprops and 13 piston aircraft, down 40% from a total of 129 aircraft delivered during the second quarter of 2008.
One aircraft having a particularly difficult year is company's largest and most recent business jet, the Hawker 4000. Following a 14-year development marathon, the PW308A-powered twin continues to experience growing pains.
"We are concurrently producing and incorporating late changes in the type design that need to be filtered into the production line as we move forward," says Boisture. "The delays in bringing the Hawker 4000 to market have been disappointing. We've made some good progress this year, but have work to do before we reach a predictable cadence."
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Aside from the production challenges, the largest customer for the new model, fractional provider NetJets, has cancelled 12 aircraft this year and deferred all deliveries for the remainder of the year as well as for next year. Boisture says the orders remain in the backlog, which stands at $6.8 billion, down from $7.6 billion in at the end of December and $7.4 billion at the end of the second quarter in 2008.
Overall, Boisture says the company lost $366 million cancellations in the quarter, though the net was a positive $84 million as a result of $450 million in 58 new orders, which include 30 twin-engined King Air turboprops.
The company also recorded an $18.8 million charge due to "lower than expected selling prices on pre-break-even Hawker 4000 selling prices", according to officials. Boisture was opaque when asked when the Hawker 4000 would begin turning a profit. "In this market, that's very difficult to project," he says.
Source: Flight International
