Hawker Beechcraft Looks to Increase International Sales

April 16, 2007
Hawker Beechcraft hopes to increase international sales to 50 percent of its total in the next two to three years.

Hawker Beechcraft Corp. knows international growth is important for the new company, which owns Raytheon Co.'s former aircraft operations.

"We need to think and act like an international company," said Jim Schuster, Hawker Beechcraft's chief executive officer. "We've got to get more sophisticated."

Hawker Beechcraft, the purchasing company formed by an affiliate of Wall Street investment bank Goldman Sachs Group Inc. and Toronto-based private-equity firm Onex Partners LP, hopes to increase international sales to 50 percent of its total in the next two to three years. Last year, 35 percent of Ratheon's sales came from international customers, up from 16 percent in 2004.

It is an industry trend seen throughout the U.S.

Before the turn of the decade, just 25 percent of all business aircraft deliveries were outside North America, said Teal Group analyst Richard Aboulafia. That's now grown to 40 percent.

In the next 10 years, Aboulafia expects overseas sales to increase to 50 percent or more.

For Hawker Beechcraft to capitalize on that, it needs to expand its sales, service and support network from the than 100 service centers it already has around the world, Schuster said.

"If you can't supply service and support, you can't sell airplanes," he said.

The aircraft manufacturer makes Hawker and Beechcraft planes for commercial and military markets. It has more than 8,500 employees, about 6,300 of whom work at the company's Wichita headquarters.

Sean McGeough, head of Hawker Beechcraft's international sales, said the company is a month or two away from announcing a partner in India to run a fixed-base operation and service center and plans to do the same in Russia next. The company also recently added staff in Britain, Italy and Dubai.

Schuster said the company also needs to look at how it designs, manufactures and markets its aircraft and how it procures parts.

"Access to markets often comes with expectations that you participate in those markets," he said, pointing out that Boeing Co. has used the strategy to market its commercial jetliners.

He and Aboulafia noted that aircraft have to be designed to meet different needs for different markets.

For example, Aboulafia said, while Middle Eastern buyers want larger aircraft, European buyers generally want smaller business aircraft, in part because operators often are charged landing fees based on the weight of their aircraft.

Schuster said Hawker Beechcraft is taking a methodical approach to its strategic planning.

"We're doing it country by country, region by region," Schuster said.

The increase in international sales is being seen as businesses expand or open in areas such as Russia and India. Also, with the weakness in the U.S. dollar, overseas customers get more value for their money in the U.S.

Schuster said many international travelers come to Wichita each week for flight training or to take their planes from the city's aircraft manufacturers.

"It's good for the town and local businesses," he said.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.