Beechcraft buy a handsome BizAv bonus for Textron
Jan. 16, 2014, Wichita, Kan. - The business aviation segments slammed the hardest in the financial crisis of 2008-2009 have been slow to recover. Except for higher end models, such as the Gulfstream G650, the outlook for the sector as a whole still looks sluggish. Encouraging developments have been few and far between, but Textron Inc.’s proposed purchase of Beechcraft certainly qualifies on several levels.
If approved, as expected, the transaction will combine two weak
players into one operation that is stronger and has much greater
prospects for success in a ferociously competitive marketplace.
Production at both companies currently is below scale, and the combined
product lines will cover price points most affected during the
Moreover, Beechcraft’s piston line will compliment Cessna’s, while
the company’s King Air twin turboprop—one of the most venerable civil
aviation icons—will fill a gap between Cessna’s single-turboprop Caravan
and jet products. With the improved efficiencies that will result from
merging the two operations, Textron should be able to run the integrated
business profitably and invest in new product development.
Textron’s acquisition will bring with it an installed based of nearly
36,000 Hawker and Beechcraft airplanes that will need servicing;
Cessna’s installed base is at least double that number. Putting
Beechcraft’s and Cessna’s global product support under a single
management team can only add to the chances for long-term success.
Under the best-case scenario, a real aviation powerhouse with actual
staying power may be in the making. But only time will tell, since
there’s no such thing as a sure bet when it comes to executing on
acquisitions or merging cultures.