NetJets Cancels $2.6B in Hawker Beechcraft Orders
In a financial update released yesterday, Hawker Beechcraft revealed that fractional provider NetJets has cancelled orders for a “significant number” of aircraft from the Wichita-based manufacturer. The aircraft were previously scheduled to be delivered in 2011. The NetJets cancellations will reduce the airframer’s current backlog by about $2.6 billion. Excluding NetJets orders but including anticipated sales and order activity in the fourth quarter, Hawker Beechcraft predicts its backlog will be about $3.5 billion on December 31. In addition to the sting from the NetJets cancellations, the company expects to post losses of between $725 million and $740 million this year, depending on whether it breaks even or incurs a loss of up to $15 million in the fourth quarter. Hawker Beechcraft expects fourth-quarter revenue of about $1.1 billion, bringing estimated full-year revenue to around $3.2 billion. Losses were compounded by nonrecurring charges of about $678 million, though these were partially offset by gains of $352 million. Hawker Beechcraft said it continues to expect “depressed demand” for general aviation aircraft in the near term.