Cessna to acquire Columbia Aircraft Company

The Columbia Aircraft Manufacturing Company is going into bankruptcy, and will be acquired by the world's largest small plane manufacturer, Cessna Aircraft Co. Cessna said on Monday 24 September that it has signed a letter of intent with Columbia to acquire "selected assets and certain liabilities" of the Bend-based plane-maker.

Columbia, formerly Lancair, suffered a severe blow after the 9/11 general aviation shutdown, but had managed to bring back over 600 workers to its Bend Airport factory. But a string of furloughs over issues such as faulty instrument panels from suppliers threw up new problems.

Columbia filed a voluntary petition for reorganisation on Monday under Chapter 11 of the US Bankruptcy Code. It said the bankruptcy resulted from a series of events dating back to 2006 that hampered the company's ability to deliver aircraft and disrupted cash flow.

This included an unanticipated and damaging delay in the certification programme for the G1000 avionics suite, a freak hailstorm that damaged 67 aircraft awaiting certification and - the last straw - a supply chain disruption for essential avionics equipment.

Columbia also submitted a motion to the bankruptcy court seeking approval of the sale to Cessna and establishing procedures that enable other interested bidders to submit offers and bid at an auction to be held in November.

The sale to Cessna is subject to the approval of the bankruptcy court and the satisfaction of the closing conditions set forth in the letter of intent, including the execution of a definitive purchase agreement with Cessna.