Hawker Beechcraft has received court approval to exit
bankruptcy as a standalone company producing only prop aircraft as Beechcraft
Corp. The court has also allowed HBC to
discontinue warranty and support programs for the Hawker 4000 and Beechcraft Premier
I/IA. What impact does the lack of
warranty support and being out of production have on Premier aircraft?
There are slightly less than 300 Beechcraft Premier aircraft in
service, of which approximately 60% are out of warranty or close to being out
of warranty. In many industries 300
units would be too small of a number to provide support. However, in the aviation industry, with long
economic lives for aircraft, this is a significant number of aircraft that will
need parts and service. As a result of
bankruptcy many of the vendors will be released from their proprietary
contracts with HBC and be allowed to sell and repair parts. The biggest negative might be a pool of
rotatables, however I suspect some maintenance providers will see value in
inventorying those as well.
The market place quickly factored in the bad news of the
Premier being out of production and the news HBC would not stand behind their
warranty and support agreements. Some of
this is over-reaction since the engine and avionics package is modern and
desirable in the light jet market. JSSI
has announced an option for Premier owners to help guarantee their operating
costs. Likely not to be inexpensive,
operators will at least obtain the ability to forecast their operating
costs. However there are issues to
operating a Premier that you don’t have with other competing aircraft. Price
will offset some of those and it appears the marketplace has adjusted prices
accordingly.
What to do if you own a Premier? I have two suggestions. First, is to fly it and keep it as long as
originally planned. When the time comes
to trade you won’t be shocked by the lower values and will understand that the
market place can be cruel but there will be a market. You may experience
some parts issues however they should not be severe. You will have gotten good
transportation at a higher life cycle cost than planned but it still provided
efficient transportation. Second, is to
bite the bullet with the lower values and take advantage of the weak overall
market that exists for the replacement aircraft. More than likely we will not see a big
percentage increase in future Premier values, but we will see competing
aircraft become more expensive. You will
soften the downside and help your future life cycle costs.
Hawkeye Aircraft Acquisitions has over 30 years of aviation
experience and is an aviation consulting and acquisition firm. Our product is the peace of mind of knowing
you have made the most informed decision available. Call or email to learn more about our
services.
Mike McCracken
President
Hawkeye Aircraft Acquisitions LLC
727 796 0903
www.hawkeye-aircraft.com
