Plane maker Hawker Beechcraft Corporation (HBC) has said its debt crisis would not impact its business in India. The US-based HBC manufactures King Air turboprop planes and Hawker jets. It has a 58 per cent share of business aircraft registered in India.
According to recent media reports from the US, the company had hired law firms specialising in bankruptcy and restructuring, as slower growth impacts earnings.
Shawn W Vick, CEO of Hawker Beechcraft Inter-national Service Company, ruled out any fallout on customers. "There will be no impact in India. There will be no impact to our customers,'' he stated.
He confirmed the company had hired two law firms to advise on financial restructuring and refused to comment on filing for bankruptcy. Vick said the company was concluding fresh debt terms with its lenders and an announcement was expected this week. The company has total debt of $2 billion. Hawker is owned by investment firms Goldman Sachs and Onex.
There are 150-160 Hawker Beechcraft planes in India, 28 being jet aircraft, and turboprop King Airs making the rest. The plane maker competes with Pilatus in the turboprop market and with Bombardier and Cessna in the mid-size jet market in India.
Vick said he was confident of increasing the business from India. Over the past five years, the company has sold a little over 40 planes here and it hopes to keep the momentum. Vick refused to disclose specific figures on order backlog and targets.
“I see continuing strong growth in the King Air product line, largely because of entry-level jets offered by other manufactuers do not have payload or performance capabilities. People are buying those airplanes and finding out that they cannot carry their passengers over long distance. They are coming back to us and buying King Air,” he said.
"2010 and 2011 were not as good as the previous years but we are optimistic about the future,'' said Daniel Keady, the company's vice-president, sales (Asia Pacific-India). "We had two order cancellations from India last year but recovered one of those. As the market recovers, we will see the customer coming back.”
“The company is not going bust. That is misinformation and is proffered by competitors,” Vick said.
“We have no intention at this point in time to do anything other than to build and service the planes. I am very enthusiastic about our future. We have excellent products and have 37,000.customers around the globe. We have invested heavily during the downturn in creating capabilities in the business. We have taken market share globally and we are addressing the debt that was placed on this business when there was a very different marketplace. Tens and thousands of companies around the world have addressed their balance sheets and its just our turn now,'' he told Business Standard.
Private jet makers are focusing on India despite various challenges to the general aviation sector here, such as customs duties, lack of facilities at smaller airports and so on.
"The government has to invest in infrastructure but no one should expect this to be resolved quickly,'' Vick said. "We have been working with government bodies to make things happen but it won't happen overnight.”