Hawker Beechcraft identifies SA as ‘key’ to its global market expansion plans

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Johannesburg, South Africa – Hawker Beechcraft Corporation (HBC), a world-leading manufacturer of business, special mission and trainer aircraft, has identified the South African commercial environment as offering some of the best growth prospects of any country in the world. According to the company, there are two key reasons for this identification. The first reason is South Africa’s potential to become one of the world’s fastest developing countries, and the second is its role as “gatekeeper” to the rest of Africa.

“As the country and the continent develop, demand for business aircraft will grow dramatically to provide access to remote parts of the region, cover vast distances, and also help counter the limitations of the transportation infrastructure, which is underdeveloped compared to other parts of the world,” said Sean McGeough, HBC president, Europe, Middle East and Africa. “Road and rail networks in many parts of Africa are limited, making travel internally a challenge. Travelling by business aircraft is therefore not only often the quickest way to travel, but sometimes the only option.”

As part of its growing focus on Africa, Hawker Beechcraft also announced it has appointed Neil Howard and Absolute Aviation as an exclusive Beechcraft dealer for sub-Saharan Africa.

Xhead = The case for South Africa

The recent invitation received by South Africa to join a conference hosted by Brazil, Russia, India and China (BRIC) is just the latest example of South Africa’s economic growth. The country has abundant natural resources, a sophisticated private sector, well developed capital markets, a strong business aviation community, and a free and vibrant media. All of this helps explain why South Africa is predicted to have the seventh fastest growing economy in the world between now and 2050(1).

Additionally, South Africa is an ideal platform for economic development into the rest of Africa, with a strong aviation industry, plus quality air traffic control services, aviation facilities and airports.

“The importance of South Africa to the business aviation market in Africa is reflected in our analysis(2) of industry data, which suggests that just over 50% of business turbine aircraft in the continent are in South Africa,” McGeough said. “Similarly, 47% of the business jet market is in South Africa, and approximately 55% of business turboprops. We expect this market dominance to increase as South Africa plays a leading role in the development of Africa as a whole.”

Xhead = The case for Africa as a continent

The continent is fast becoming a priority investment destination as it increasingly opens its doors to foreign investors. Between 2000 and 2007, foreign capital flows into Africa increased from $15 billion to $87 billion(3). With a population approaching one billion people, Africa represents a huge market and one that is rich in largely untapped mineral and natural resources. In the last two years, consumer companies, including Wal-Mart and Vodafone, have sought to gain a foothold in Africa through large acquisitions.

Intra-African trade is also increasing, particularly from South African companies such as FirstRand, the second largest financial services company in Africa, which has announced plans to expand into Nigeria,Tanzania, Angola, Ghana and Kenya. More generally, trade barriers are increasingly being addressed to encourage intra-African trade and economic integration on the continent appears poised to increase.

The International Monetary Fund (IMF) forecasts that seven of the top 10 fastest growing economies in the next 10 years will be in Africa, and Standard Chartered forecasts Africa’s economy to grow at an average annual rate of 7% over the next 20 years, marginally faster than China’s.

Xhead = HBC in Africa

The company’s announcement regarding Absolute Aviation is intended to enhance Beechcraft sales in Africa. Neil Howard and his team of professionals at Absolute Aviation have considerable experience in aircraft sales, maintenance and operations.

Last year, HBC strengthened its African operations by adding global customer support facilities in Lagos, Nigeria, Johannesburg and Cape Town, South Africa. These strategically placed centres allow Africa’s business travellers to enjoy unprecedented access to Hawker Beechcraft services.

“Africa represents a great opportunity for us, as travel around the continent is becoming increasingly important,” said McGeough. “We have already seen strong interest in our aircraft from a number of organisations, including multinationals based there. In 2010, for example, we accounted for half of all business turbine aircraft sales in Africa and we are confident we will maintain our position as a market leader here.”

HBC’s King Air models are particularly popular in Africa, as a result of their durability, reliability, fuel-efficiency and the ability to operate almost anywhere. The King Air 250 has a maximum range of 1 610 nautical miles and can take off in only 2 111 feet from a sea level airport, making it an ideal choice of transportation for corporate executives travelling throughout Africa.

Hawker Beechcraft Corporation is a world-leading manufacturer of business, special mission and trainer aircraft – designing, marketing and supporting aviation products and services for businesses, governments and individuals worldwide. The company’s headquarters and major facilities are located in Wichita, Kansas, with operations in Salina, Kansas; Little Rock, Arkansas; Chester, England, UK; and Chihuahua, Mexico. The company leads the industry with a global network of more than 100 factory-owned and authorised service centres. For more information, visit www.hawkerbeechcraft.com.

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(1) PriceWaterhouseCoopers

(2) HBC analysis of JetNet data

(3) McKinsey Global Institute, Progress and Potential of African Economies

This release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, including statements that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements are based on management’s assumptions and assessments in light of past experience and trends, current conditions, expected future developments and other relevant factors. They are not guarantees of future performance, and actual results may differ significantly from those envisaged by our forward-looking statements. Among the factors that could cause actual results to differ materially from those described or implied in the forward-looking statements are general business and economic conditions, production delays resulting from lack of regulatory certifications and other factors, competition in our existing and future markets, lack of market acceptance of our products and services, the substantial leverage and debt service resulting from our indebtedness, loss or retirement of key executives and other risks disclosed in our filings with the Securities and Exchange Commission.

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