Print edition: 
Moody's lowered Hawker Beechcraft's credit ratings this month, reflecting its view that the down economy means the company is unlikely to return to profitability anytime soon, Moody's Investors Service wrote in a report.
"The downgrades reflect Hawker Beechcraft's mounting retained deficit and our view that the soft economy dims chances for profitability anytime soon," its report said. "Although limited near-term debt maturities exist, with the prospect of further losses we view the capital structure to be unsustainable."
Hawker Beechcraft said in a statement Wednesday that it was disappointed to learn of the rating change.
Hawker's credit rating fell from Caa2 to Caa3. Moody's ratings are opinions of the credit quality of individual obligations or of an issuer's general creditworthiness.
Obligations or issues rated Caa are judged to be of poor standing and are subject to high credit risk, Moody's said.
The down economy has hurt sales of light and mid-size business jets at Hawker Beechcraft and other aviation manufacturers.
"While management has aggressively lowered overhead and cut production costs, the revenue outlook seems weak," the report said.
Cash fell from $423 million in December to $143 million in June, it said. Hawker also borrowed $50 million this summer and expects to borrow more to help fund its operations through this year, Moody's report said.
The company dealt with delivery disruptions with its Hawker 4000, which stemmed from delayed certification on the software in its avionics. Certification has since been received allowing for U.S. deliveries. But it has not received the certification allowing for international deliveries.
And King Air production was disrupted because of problems with the planned transition of production out of Wichita to third-party suppliers and to its Mexico facility, it said.
Many factors leading to the ratings change are economic forces facing all aircraft manufacturers, Hawker said in its statement, especially those that build light to medium-size business jets. Those continue to be hardest-hit segments of the market.
Moody's analysis didn't consider the company's broader revenue base, including its focus on growth in its global customer service support division, global sales of its trainer and attack aircraft and focus on special missions, the company said.
Hawker will continue to invest in products, manufacturing and service to make sure it's prepared for the "new normal market" for corporate, personal and military aircraft, it said.
One analyst noted that the downgrade was only one of "a bunch of others" Moody's downgraded at the same time.
"I'd call them 'economy sensitive' companies because, let's be honest, Hawker... is very much driven by the economy. So are Cessna and many others," said Wayne Plucker, senior industry analyst with Frost & Sullivan's aerospace and defense group.
The downgrades follow a general sense that the economy isn't going to recover quickly, he said.
"I don't think we can read too much into (it)," Plucker said of Moody's action.
If there was something structurally wrong within the company along with the soft market, Plucker said, Hawker Beechcraft would have been downgraded two points instead of the one.
"I don't think there was a dynamic there that should be concerning to shareholders or people who do business with them on a routine basis," he said. "There's no sign they're sufficiently cash-strapped that there would be delays in payments."
