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Hawker Beechcraft signals an exit from business jet sector

A Hawker Horizon business jet is shown in an undated file photo.

AP

The crowded business-jet market is set to be shaken up as one of the Big Six players – Hawker Beechcraft Inc. – signals it's looking to get out of the sector.

After talks to sell itself to a Chinese firm collapsed, the financially troubled Wichita, Kansas-based company says it plans to go it alone but as a slimmed-down operation focused on its turboprop, piston, special mission and trainer/attack aircraft.

It said it is looking at options for its Hawker line of business jets, including a sale of some or all of its product lines "or a closure of the entire jet business if no satisfactory bids are received."

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The Hawker business-jet division has taken a beating in recent years as demand for the smaller, lighter aircraft it makes continues to fall.

Carrying about $2.5-billion (U.S.) in debt, Hawker-Beechcraft – owned by the private equity units of Goldman Sachs Group Inc. and Toronto's Onex Corp. – filed for bankruptcy protection in May.

Analysts and industry experts have questioned whether any of the other major players – Bombardier Inc., General Dynamics Corp.'s Gulfstream, Brazil's Embraer SA, Textron Inc.'s Cessna Aircraft and France's Dassault – would be interested in some or all of Hawker Beechcraft's business-jet assets.

Bombardier is already in the small- and medium-sized segment with its Learjet division. And its launching a new model, the Lear 85.

Hawker owns only about 10 per cent of the global market for business jets.

Both Embraer and Cessna have previously said they might be interested in buying some Hawker assets, notably its support network.

Embraer has made inroads in the light-aircraft market with its successful Phenom 100 and 300 business jets.

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And the business-jet market as a whole is getting even more crowded. China is aggressively developing a business-jet industry and has teamed up with Cessna to manufacture aircraft on its home turf, and there are at last report at least five companies – including Honda – planning their entry.

Onex and Goldman Sachs paid $3.2-billion to acquire Hawker Beechcraft from Raytheon Co. in 2007.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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