Boisture ‘surprised’ by cancellations from NetJets

 - December 28, 2009, 11:00 AM

Hawker Beechcraft chairman and CEO Bill Boisture said during a hastily arranged fourth-quarter update conference call that he was “surprised” at the “timing and magnitude” of the $2.6 billion in cancellations from fractional provider NetJets (see page 69). According to Boisture, Hawker Beechcraft had been in discussions for months with NetJets about its fleet orders, but it was “new information” to him when the fractional said it wanted to cancel what amounted to 90 percent of its orders with the aircraft maker. Boisture noted, however, that the bulk of the NetJets orders were scheduled for delivery between 2012 and 2020, “so there will be no material impact on Hawker Beechcraft’s liquidity or profitability.” The remaining outstanding orders from NetJets for “about 20” aircraft cover a mix of Hawker 900XPs and Hawker 4000s, with the latter type accounting for more than half this order book. Several analysts grilled Boisture about when he first knew of the cancellations, especially in light of a $200 million loan that Hawker Beechcraft solicited and received from investors in November.