By Graham Warwick in Washington DC
US defence giant explores 'strategic alternatives'
Raytheon is looking to sell or spin off its general aviation and business aircraft manufacturing division as it scales back delivery plans for the Hawker 4000 because of continuing delays in certificating the super mid-size jet.
The US defence giant says "it intends to explore strategic alternatives for Raytheon Aircraft", which may include "a potential sale of the business, and initial public offering or spin-off to shareholders".
Any sale or spin-off will not include the Flight Options business-aircraft fractional-ownership company or Raytheon Airline Aviation Services, its regional-aircraft asset-management operation.
"It is important that everyone understands that this is not an announcement of a decision...Raytheon has announced its intention to explore strategic alternatives for its aircraft business that could ultimately result in one of the outcomes detailed in [last week's] Q2 earnings release, including the potential that Raytheon Aircraft will remain with Raytheon," says Jim Schuster, chairman and chief executive of Raytheon Aircraft. "Raytheon Aircraft is a healthy business, we are growing and the market is strong. Raytheon felt that the time was right to explore strategic alternatives," he adds.
The move comes as Wichita, Kansas-based Raytheon Aircraft's heavy investment in development of the all-new Hawker 4000 draws to a close, with flight testing complete and the company working to achieve the delayed certification.
Because of the continued delays, Raytheon has halved the number of Hawker 4000s it will deliver this year to five, but with higher Beechcraft King Air and Hawker 400XP sales still plans to hand over 424 aircraft this year, up from 354 last year.
With one or more derivative aircraft expected to be launched later this year, Raytheon will have completed a revamp of its product line. Sales and margins have also continued to improve steadily, and the aircraft business is expected to post revenues of $3-3.2 billion, and operating margins of $175-185 million, for the full year.
Several years ago there were rumours of a possible sale to Gulfstream, but the asking price was reportedly too high.
One issue for any buyer is that Raytheon Aircraft has one of the widest product spans of any manufacturer: its Beechcraft range includes the piston-powered Bonanza and Baron, turboprop King Air and Premier I entry-level jet, while the Hawker line-up comprises the light 400XP, mid-size 850XP and super mid-size 4000.
Source: Flight International