GRAHAM WARWICK / WASHINGTON DC
Programme schedule slips as company warns that a $900m order could now be at risk
Certification of Raytheon's Hawker Horizon super mid-size business jet is likely to slip into early 2004, and the company has warned that a $900 million order - believed to be from fractional-ownership company NetJets - could be restructured or cancelled "due to market conditions and development and certification delays".
Another $850 million in business aircraft orders, mainly for Beechjet 400As and Hawker 800XPs, will be removed from Raytheon's backlog when the company takes control of fractional-ownership joint venture Flight Options (Flight International, 18-24 March). The orders, resulting from Flight Options' merger with Raytheon Travel Air last year, will remain in place, but financial regulations will prevent the manufacturer including them in its backlog.
Last month, after Cessna parent company Textron revealed NetJets was cutting orders for Citation business jets, Raytheon said it was in talks with the fractional company. In 1999 NetJets placed an order for 50 Horizons, with options for 50 more, in a deal valued at $2 billion. As of March, the company listed orders and options for 84 Horizons.
Including the NetJets aircraft, Raytheon has orders and options for 130 Horizons. When it was launched in 1996, the super mid-size business jet was scheduled for certification in 2001. Last year, certification was rescheduled for late 2003, but Raytheon now suggests approval could slip into 2004, although customer deliveries may not be affected.
Raytheon, meanwhile, says negotiations to increase its 49.9% stake in Flight Options continue. The company is offering to convert debt owed by Flight Options into equity and provide additional funds for the fractional, which has been unprofitable since it started in 1998 and which is not generating enough cashflow to finance its operations. Raytheon warns that Flight Options' more than 2,000 owners can, "in certain circumstances", require the company to buy back their shares, resulting in a potential $530 million obligation.
Source: Flight International
