With Hawker Beechcraft attempting to clear the final hurdle in Chapter 11 proceedings and emerge from bankruptcy, Judge Stuart Bernstein said earlier today that he would approve the joint plan of reorganization for all but one of the subsidiaries currently under Chapter 11 protection. Bernstein reserved judgment regarding the Hawker Beechcraft Corp.
Hawker Beechcraft key creditors voted “overwhelmingly” today to approve the Wichita-based OEM’s proposed Joint Plan of Reorganization as part of its efforts to emerge from bankruptcy.
JPMorgan North America Equity Research is forecasting a 5-percent rise in business jet deliveries this year, according to the firm’s latest monthly business jet report. It predicts that 627 business jets (excluding very light jets) will be shipped this year, compared with an estimated 596 jet deliveries last year.
In a filing in bankruptcy court just before Christmas, Hawker Beechcraft asked for court approval to shed two underfunded pension plans covering some 9,500 non-union workers and retirees. The request is part of an agreement with the federal government’s Pension Benefit Guaranty Corp. (PBGC) and the OEM’s machinists’ union. Terms of the agreement require PBGC to assume responsibility for the two terminated pensions, while Hawker Beechcraft will keep the pension plan covering its 8,200 current and former union employees. A hearing to consider the plan is scheduled for January 17.
John (Rick) Haskins, one of the founding partners and former president and CEO of Jet Support Services (JSSI), died last week in Chicago at the age of 67 after a battle with cancer. He led the company, the first independent engine hourly-cost maintenance program provider, from its inception in 1989 until its 2008 sale to private equity firms R.H. Book and 1848 Capital Partners. Haskins then went on to found an investment firm that provides growth capital to aviation-related companies, and to lead a short-lived helicopter airport shuttle service.
Business jet demand “remains weak, but is not getting much worse,” JPMorgan Investment Research noted in its latest business jet monthly report. This sentiment is reflected in its forecast of 2 percent growth in business jet deliveries for next year.
At the NBAA Convention later this month in Orlando, Fla., “Manufacturers will likely emphasize the potential for rising deliveries beyond 2012, pockets of demand strength and the products they are developing,” JPMorgan aerospace analysts wrote in the firm’s latest business jet monthly report, released yesterday. “However, with U.S. and European flight ops flat to down year-to-date, Chinese demand facing pressure and OEM backlogs yet to turn up decisively, optimism should be muted.”
JPMorgan downgraded Embraer yesterday from overweight to neutral, in large part due to concerns about Embraer’s airliner business. However, the investment firm noted that “continued weakness” in flight operations and other indicators “are leading us to dial back our business jet delivery forecast,” but it still predicts healthy growth in this segment.
“Business jet deliveries rose 11 percent year-over-year in the first half of the year, prompting some commentary that a recovery is under way, but we view this conclusion as premature,” JPMorgan North American Research said in its latest monthly business jet outlook, released yesterday. “Tougher comparables and fewer Hawker deliveries post-bankruptcy should result in a second-half decline that holds deliveries flattish for the year.”
“We expect a bounce in 2012, though we believe the [business jet] recovery will start slowly and we forecast delivery growth of 8 percent,” JPMorgan Investment Research said in its latest monthly business jet market report, released today. However, evidence of a recovery on the low end is still “not compelling,” it noted.