Newly renamed Raytheon ready for future challenges
This seventh annual European Business Aviation Convention & Exhibition sees one of the industry’s veteran players celebrate both a distinguished history and a vital new beginning. Hawker Beechcraft Corp. marked the 75th anniversary of its Beechcraft roots on April 19, less than a month after the new company was created after parent Raytheon Aircraft was acquired by equity groups Onex Partners and GS Capital Partners for $3.3 billion.
The new company is making its first full public appearance this week here in Geneva, hailing its latest aircraft for the 21st century European business aviation market. At the same time, it will be celebrating a distinguished history that stretches back to 1932, when Walter and Olive Ann Beech formed Beech Aircraft Corp. to bring the world the classic Model 17 “Staggerwing” (see timeline below).
Hawker Beechcraft encompasses former Raytheon Aircraft facilities and other assets in Wichita and Salina, Kansas, and at Little Rock, Arkansas, and Dallas, Texas. It also includes a chain of FBOs in the U.S., Mexico and the UK (where its service center will now trade under the name Hawker Beechcraft Services–Chester). But it does not include Raytheon Company’s Flight Options fractional ownership program or Raytheon Airline Services, which manages the service and maintenance program for the out-of-production Beechcraft 1900D.
GS Capital, a Goldman Sachs affiliate, and Toronto, Canada-based Onex paid a hefty price for a company that’s been rebounding of late, having spent the past 25 years under the wing of the Raytheon group. Many industry insiders were surprised that Raytheon was able to fetch such a high figure, but the financiers clearly saw value in a strong family of popular jet and twin turboprop models. “One of the best things I saw come out of this process is that people now feel a certainty about this business,” said Hawker Beechcraft chairman and CEO Jim Schuster. “I believe this is how we’ll be structured for quite a while.”
Schuster has been quick to dispel suggestions that GS and Onex will be looking to no more than turning a quick profit on their purchase. Onex, for one, has recent aerospace pedigree, having already acquired Boeing’s former Wichita airframe manufacturing division to relaunch it as Spirit AeroStructures. Goldman Sachs also has investments in aircraft composites, as well as in one of the new very light jet manufacturers (understood to be Adam Aircraft).
“We ended up with great partners,” said Schuster. “They understand this industry, the markets we compete in and what it takes to be successful. There’s no quick get-in, get-out scheme that makes sense in this business.
“The morale in this business is better than it’s ever been since I’ve been here,” he added. “This wasn’t one of those corporate takeovers where you have to take down your beloved signs. That happened 25 years ago with Raytheon. These are the good days.”
Whatever the problems the manufacturer– which was not a core unit of Raytheon Corp.–faced under the parent company, many of its employees were happy to see the change in ownership. Though Schuster acknowledged that the airframer faced some troubles under the parent company (such as long delays in the certification of the Hawker 4000–formerly the Horizon), he was quick to point out that many of the issues stemmed from Wichita, and not Raytheon Corp.
“The uncertainty that existed around this business for a number of years was not helpful,” said Schuster. “The problems that developed with this company in the 1990s came from here [Wichita]. Raytheon invested a lot of money. It never denied us anything.” He went on to say that while Raytheon Aircraft was sometimes an afterthought for the parent company, he expects that to change, as the new company will have a dedicated board and keen investors.
According to Schuster, there haven’t been any budget cuts at Hawker Beechcraft yet and he said he doesn’t see that happening anytime soon. But, he did concede that, “We’ve got to be more cost effective. We have investors who expect us to increase the value of this business.”
Schuster has also dampened suggestions that Hawker Beechcraft urgently needs to plug a product gap between the company’s piston and turboprop line and an entry-level jet. “We have a detailed roadmap for new products,” he said. “In the near term it will be focused exclusively on derivatives of existing products.” In his view, the company has little to gain by rushing into an already crowded very light jet sector–not least because he believes the King Air twin turboprops are still giving this new class of business jets a serious run for their money.
Overall, Schuster said, there should not be any major directional shifts as a result of the new ownership. The company will focus on service and quality manufacturing. He said the FBO chain is not critical to the future of the business, and so likely will not expand. However, service centers are key, he said. “[Goldman Sachs and Onex] understand what it means to have strong support and service for an airplane,” the Hawker Beechcraft boss said.
Beechcraft Heritage Stretches Back to the Thirties
When Walter and Olive Ann Beech founded Beech Aircraft Corp. in 1932, business aviation was barely in its infancy in the U.S. and practically nonexistent here in Europe. The company and its successors have been at the heart of the industry’s development ever since, as well as finding time to build military training aircraft and twin turboprop airliners. Here is a summary of its main achievements:
1937: Beech introduces the Model 18 “Twin Beech,” which proves to be to bizav what the DC-3 was to the airlines and remains in production for 33 years until 1970.
1947: Beech introduces the Model 35 Beech Bonanza–a high-performance, single-engine business airplane. Sixty years on, the family is still in production in the shape of the latest G36 model.
1961: Beech introduces the Baron B55–the forerunner to today’s Baron G58.
1962: Britain’s De Havilland Aircraft Co. conceives the Model 125 business jet with a stand-up cabin throughout its 19-foot, 4-inch cabin and powered by Rolls-Royce Viper 520 engines. Over the next three decades De Havilland went through several incarnations before being bought from British Aerospace in 1993 by Raytheon Aircraft to form the bedrock of the company’s Hawker business jet line.
1964: Beech introduces the Model 90 Beech King Air, launching a twin turboprop lineage that is now thriving in its fifth decade.
1968: Beech introduces the Beechcraft 99 regional airliner.
1971: The product family’s then-owner Hawker Siddeley stretches the Hawker airframe by two feet. Moving through the 1970s, the 600 series is re-engined with the Garrett TFE 731 turbofan and the 700 series is introduced.
1980: Beech Aircraft Corpor-ation is acquired by electronics and technology group Raytheon Company.
1985: Beech announces the addition of the Beechjet (former Mitsubishi Diamond) to its product line–offering transportation for eight to 10 passengers at speeds of up
to 535 mph.
1986: A prototype of the eye-catching Beech Starship twin pusherprop makes its
first flight on February 15 and is subsequently certified at the end of 1989.
1989: Beech moves Beechjet production from Japan to Wichita and introduces the Beechjet 400A with a larger interior and a more advanced flight deck.
1991: Beech introduces the new C90B King Air.
1993: Raytheon Company acquires British Aerospace Corporate Jets and renames the company Raytheon Corporate Jets.
1994: Beech Aircraft and Raytheon Corporate Jets merge to form Raytheon Aircraft Company.
1995: Raytheon introduces the new Premier I light jet, which goes on to make its first flight on Dec. 22, 1998–exactly 53 years after the maiden takeoff of the Beech Bonanza.
1996: Raytheon introduces the super-midsized Hawker Horizon at the NBAA convention (soon to be fully certified, almost 11 years later, as the Hawker 4000).
2001: Premier I completes certification; Jim Schuster named chairman and CEO
of Raytheon Aircraft; Hawker Horizon makes first flight.
2002: Raytheon announces that it will resume the use of its Hawker and Beechcraft brand names.
2003: Raytheon introduces the Hawker 400XP (formerly known as the Beechjet 400A) at the third annual EBACE exhibition.
2004: Raytheon installs Garmin 1000 glass cockpits in the Beechcraft Bonanza and Baron aircraft.
2005: Raytheon introduces the Hawker 800XPi as an improved version of the Hawker 800XP at the fifth EBACE event. Later at the NBAA convention, the company introduces the Hawker 850XP.
2006: Raytheon introduces two new bizjet models, the Hawker 900XP and the 750.