Chinese company to buy Hawker Beechcraft: A big threat to Indian private Jet market

Struggling aircraft maker Hawker Beechcraft announced that it had reached a $1.79 billion "exclusivity agreement" with a Chinese aerospace manufacturer for the sale of its business jet and general aviation operations in a deal that will save thousands of jobs in Kansas and Arkansas.

Under the agreement Beijing-based aerospace manufacturer Superior Aviation Beijing Co., Ltd., will buy Hawker Beechcraft and make payments over the next six weeks to support ongoing operations until the deal is finalized.

If the transaction is completed, Superior intends to maintain Hawker Beechcraft's existing operations while putting "substantial capital" into the company and its business and general aviation product line, saving thousands of American jobs, the company said.

"Importantly, this combination would give Hawker Beechcraft greater access to the Chinese business and general aviation marketplace, which is forecast to grow more than 10 percent a year for the next 10 to 15 years," Miller said.

Under the agreement, Superior intends to make Hawker Beechcraft its flagship investment, maintain its U.S. headquarters, management team and employees and continue product development throughout its lines. If the parties negotiate a definitive agreement during the 45-day exclusivity period, it would be subject to an auction, Hawker said.

Superior Aviation is 60 percent owned by Beijing Superior Aviation Technology Corp., Ltd, a closely held private entity, and 40 percent by Beijing E-Town International Investment & Development Corp., Ltd, a company controlled by the Beijing municipal government.

With this acquisition, China will maximize its services in general aviation and private Jets sector. Being one of the most attractive aviation markets, China may foresee increase in foreign investment in the general aviation sector in the near future; giving strong competition to Indian aviation market.