Hawker Beechcraft lost US$632.8 million in 2011 as aircraft sales fell by 13.2 per cent, pushing the beleaguered biz jet and GA aircraft manufacturer to the brink of bankruptcy.
In its delayed 2011 annual report, released this week, Hawker-Beechcraft said it had stopped making interest payments on some of its existing debt as it worked on a plan to restructure its balance sheet. But it said it would likely run out of cash this year if it cannot find a way to borrow more.
“The company has suffered recurring operating losses resulting in a significant net shareholder’s deficit that raises substantial doubt about its ability to continue as a going concern,” the report said. “Due to the fact that we have recurring negative cash flows from operations and recurring losses from operations, we will need to seek additional financing. There is substantial doubt that we will be able to obtain additional equity or debt financing on favorable terms, or at all, in order to have sufficient liquidity to meet our cash requirements for the next 12 months.”
The 2011 losses were more than double Hawker Beechcraft’s 2010 losses of $304.9 million. Aircraft deliveries fell from 238 in 2010 to 213 last year. Despite the lower deliveries, the company’s order backlog shrank to $1.1 billion, down from a high of $7.6 billion at the end of 2008. Hawker Beechcraft said 2012 deliveries were also likely to be down, due to a furlough on production of some aircraft models blamed to difficulties in obtaining composite parts.
The company has blamed its struggles on a heavy debt burden and prolonged weakness in the general aviation market. Overall deliveries of general aviation aircraft fell 7.5 per cent in 2011, according to the General Aviation Manufacturer’s Association.
Deliveries of Beechcraft GA aircraft fell from 214 in 2010 to 198 last year, while shipments of Hawker military aircraft fell from 50 to 40.
The only bright spot for Hawker Beechcraft was a $17.6 million increase in customer support sales, which reached $562.2 million.