Is Flight Options Close to Bankruptcy?

[RJL]

I was told that Flight Options owes Raytheon so much money, that Raytheon had no choice but to take over ownership of Flight Options. I was wondering if this was true until I did some research on Raytheon's web site (see below). I also called an analyst I know at JP Morgan- he said that all signs look like Raytheon will take control of Flight Options and there may be a managment "shake up" at Flight Options very soon- Anyone know if this happened yet? Will it still be called Flight Options or will they call it Travel Air again? It amazes me how much money just goes out the window these days when companies do this kind of stuff. How much lower can the economy go? What a mess.

I'm not sure what this all means, but it doesn't sound good. I hope that things stabilize for this company and the others soon, Especially since Raytheon was trying to get rid of Travel Air for a long time before the merger with Flight Options, and now it looks like it had to take it back! You can't make these things up! I guess I should stop checking my mailbox for a letter from Flight Options. Every day I hear about more and more big and small companies laying off pilots- Everyday I come to work, not knowing whether I should clean out my locker or not!

Here's the info. I found at the Raytheon web site-

http://investor.raytheon.com/edgar.cfm

then click on this link
"11/06/02 10-Q Quarterly Report "


Here's what it says-

In March 2002, the Company formed a joint venture with Flight Options, Inc. whereby the Company contributed its Raytheon Travel Air fractional ownership business and loaned the new entity $20 million. The Company’s investment in and other assets related to the joint venture totaled $83 million at September 29, 2002. The new entity, Flight Options, LLC, has been pursuing additional equity financing, but has not yet secured the funds. In light of current capital market conditions, there can be no assurance that Flight Options will ultimately be successful in attracting additional outside funding. If Flight Options is not successful in this regard, the Company may offer to exchange the Flight Options debt it currently holds for additional equity in the joint venture, whereby the Company could be responsible for its operations, own a majority of Flight Options, and consolidate Flight Options in its financial statements. If the Company consolidates Flight Options, it is not expected to have a material effect on the Company’s financial position or results of operations in 2002 or 2003, although the Company would reduce its reported Aircraft backlog by approximately $850 million related to an order received from Flight Options in the first quarter of 2002.

 

[fracman]

Pretty interesting - it looks like Raytheon, in an effort to exit the fractional business, will probably end up with both Travel Air and Flight Options in the near future. What a mess.

 

[sky4]

Raytheon

I just read it! This is not what I had heard, but I guess I just saw it in black and white. I just wonder what is really in the works?

Time will tell.

 

[sky4]

Raytheon

I just read several other reports on other companies, and they have the same type stuff in there reports. It is a cover your butt by Raytheon due to lawsutes.

 

[Aspiring to be]

Cover-up!!

sky4 I just read several other reports on other companies, and they have the same type stuff in there reports. It is a cover your butt by Raytheon due to lawsutes.



Sky 4 could you explain a few things?

1. What types of lawsuits?
2. What other company’s reports are you talking about?
3. Is FLOP's in debt to Raytheon?
4. Is the debt to Raytheon coming due?
5. Does Raytheon own 49.9% of FLOP's?
6. Has FLOP's failed to get additional financing?
7. Are you just having a hard time understanding the truth?

 

[mike]

Be nice.

I hope that you don't aspire to be rude. SKY4 might work for FLOPS and these things have a way of causing added stress around the holidays.

You can find the structure of the Flight Options, LLC. joint venture. Raytheon is a publicly held company. Go to Edmunds and look up the first and second quarter filings. The end of the filing will have a detail of liability agreements.

Raytheon does not want to be in fractional business. In fact, Raytheon does not want to be in the airplane business! RAC has been up for sale since 2000.

The point of this disclosure in the third quarter report is very straight forward. Raytheon is stating that the other party in the joint venture has failed to find financing, and it is doubtful if the party will find financing. There is probably language in the joint venture agreement that allows Raytheon to offset debt (loan) with equity (control) in the joint venture.

I don't believe Raytheon wants this to happen, but they will protect what is left of their investment. They will take over Flight Options, LLC., cut management and look for a buyer.

 

[Aspiring to be]

Rude

Sorry that I came across as rude. I just like to see facts to dispute facts. I agree with your post concerning Raytheon. They have to much invested to do less.

 

[Lrjet55]

Mike,

"They will take over Flight Options, LLC., cut management and look for a buyer."

This very statement of your speaks volume and summizes my opinion regarding the future of FLOPS. I have a few good friends working there who enjoy the job and who are hoping for this to be thier career job yet it appears to me that management is what holds this company back.

 

[mike]

The booming economy of the 90's made us all look like great managers. But, times have changed and the warts appear.

This is a tough time for all companies. Let's enjoy the holiday and be thankful for what we have. If you are on the road this thanksgiving, be safe.

Mike.

 

[fracman]

Raytheon May Have To Take Control of Fli

Raytheon May Have To Take Control of Flight Options
In its third-quarter Form 10-Q filing with the Securities and Exchange Commission, Raytheon Co. of Lexington, Mass., stated: “In March 2002, the Company formed a joint venture with Flight Options Inc. whereby the Company contributed its Raytheon Travel Air fractional-ownership business and loaned the new entity $20 million. The Company’s investment in and other assets related to the joint venture totaled $83 million Sept. 29, 2002. The new entity, Flight Options LLC, has been pursuing additional equity financing, but has not yet secured the funds. In light of current capital market conditions, there can be no assurance that Flight Options will ultimately be successful in attracting additional outside funding. If Flight Options is not successful in this regard, the Company may offer to exchange the Flight Options debt it currently holds for additional equity in the joint venture, whereby the Company could be responsible for its operations, own a majority of Flight Options and consolidate Flight Options in its financial statements.” Flight Options CEO Kenn Ricci told AIN that the information quoted above is accurate, and that the Cleveland-based fractional operator has signed a letter of intent for additional financing with an outside investor. “If we are not able to obtain outside investment,” he explained, “then Raytheon is prepared to support Flight Options. Raytheon likely made this disclosure so it would not come as a surprise to the investment community if it does happen.” He said he could not say more about the outside investor at this time. Squelching rumors that he would be replaced if Raytheon took over control of Flight Options, of which Raytheon now holds 49.9 percent, Ricci said he plans to stay at the helm of the company.