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Economic turbulence has shrunk the market for business jets, and it’s causing an especially bumpy ride for Hawker Beechcraft.

The Wichita, Kan.-based aircraft maker filed for bankruptcy protection this week, seeking approval for a plan that would write an estimated $2.5 billion in debt off its books and eliminate almost $125 million in annual cash interest expenses.

Hawker Beechcraft Corp., which is owned by Onex Partners and GS Capital Partners, a Goldman Sachs private equity fund, has struggled with the sluggish business jet market more than other plane makers because it was purchased in a highly-leveraged deal at the peak of the general aviation market, just before the market tanked.

“It is one badly damaged firm, in a badly damaged market segment _ just a unique set of circumstances,” said Richard Aboulafia, an aviation analyst with Teal Group, a Fairfax, Va.-based aerospace and defense analysis company.

The economic downturn that began in late 2008 hit business jet makers especially hard, as corporate customers that were lining up for their own planes earlier in the decade began looking for ways to trim fat. The public outrage that Detroit auto executives took private jets to Washington seeking bailout money that November reinforced the planes’ image as a symbol of corporate excess. Two months later, the White House pressured Citigroup to cancel the planned delivery of a jet.

Wichita, the self-proclaimed “Air Capital of the World,” is the home of major manufacturing plants not only for Hawker Beechcraft but also for Boeing, Spirit AeroSystems, Cessna, Bombardier and more than a hundred smaller aircraft suppliers. But the business jet segment of industry has struggled as its sales sunk by 56 percent during a global economic downturn. Another blow for Wichita came earlier this year when Boeing announced it was closing its defense plant in Wichita.

“Frankly, given what Wichita has been through, this is unpleasant but relatively small,” Aboulafia said.

More than 13,000 aircraft workers here have lost their jobs since the 2008 start of the Great Recession, which pummeled sales of the small and mid-size business jets made by three of Wichita’s major manufacturing facilities.

“This is definitely another blow, another nail in this situation we have been going through and it is definitely not good news,” said Jeremy Hill, director for The Center for Economic Development and Business Research at Wichita State University.

Since its founding with the highly-leveraged 2007 purchase of Raytheon’s former aircraft unit, Raytheon Aircraft, Hawker Beechcraft has carried a heavy debt burden, reporting a total debt of $2.3 billion at the end of 2011, according to its annual statement to the Securities and Exchange Commission.

Hawker Beechcraft will likely emerge from bankruptcy keeping a majority of its business, although one or two of its product lines could be shut down, Aboulafia said.

“This is a company with good products and a good name,” he said. “They just happen to be carrying a lot of debt and they are going to have to make some tough choices about what they are going to do next.”

In 2009, Hawker delivered 98 business jets. Deliveries plummeted to 51 last year. It has stopped making its Hawker 400XP until demand improves, according to a filing last month.

Hawker Beechcraft sold $2.3 billion worth of business and general aviation planes in 2009. Last year those sales were almost $1 billion lower.

There’s little reason to buy a new jet right now. There are more than 4,000 used business planes on the market right now, said Gordon Blalock, vice president for sales at Omni International Jet Trading. “The market’s so depressed,” he said. “We’re seeing some of these airplanes selling for less than 50 percent of what they sold for brand new.” Several years ago, some planes actually appreciated in value because demand was so high, he said.

Cai von Rumohr, an analyst at Cowen and Co., said Hawker Beechcraft’s financial problems have made it harder to sell jets in the down market, because jet owners want to know that the company that built its plane will be around to service it and make parts.

“They have been losing share in the (business jet) market,” he said. “The crisis of confidence among their customers has been an issue.”

The company also makes trainers and other small planes for the military, but civilian planes are still 56 percent of its revenue, compared to 27 percent for military planes. Hawker has delivered more than 700 T-6 trainers, most of them to the U.S. Air Force and Navy. But that contract is winding down. Hawker is trying to sell a light attack version of that plane to the Air Force, which is reconsidering its initial pick of a competing plane.

For Wichita as well as Kansas, the stakes in the future of Hawker Beechcraft and the aviation industry are high.

Aircraft sales comprise the state’s number one export, accounting for a third of the products it makes, Hill said. In 2008, aerospace accounted for $4.3 billion of Kansas exports _ a number which plummeted to $2.1 billion by 2010. Kansas used to be the sixth largest city among U.S. aviation exporters in 2008, dropping to tenth by 2010.

Hawker Beechcraft employs some 7,400 people, with roughly 4,700 working at its Wichita facility. It also has factories in Little Rock, Ark., Britain and Mexico, as well as more than 100 service centers worldwide.

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MONTREAL

The leader of Cyprus’ Orthodox Christian Church says it wants to invest in the country’s energy sector.

Archbishop Chrysostomos II said Monday the Church is looking primarily at solar panel manufacturing and building a power plant as part of investment plans that could run in the “tens and possibly hundreds of millions” of euros (dollars).

Chrysostomos II says the Church’s investment is aimed at boosting the country’s economy.

Eurozone member Cyprus is relying on a (EURO)2.5 billion ($3.27 billion) low-interest loan from Russia to see it through this year after a string of credit rating downgrades have left it unable to borrow from international markets.

Officials hope the discovery of a sizable, offshore natural gas field will help turn the economy around.

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U.S. builders trimmed activity for a second straight month in February, pushing construction spending down by the largest amount in seven months. There was widespread weakness with spending on home building, office construction and government projects all dropping.

The Commerce Department reported Monday that construction spending fell 1.1 percent in February after a drop of 0.8 percent in January which was revised down from an initial estimate of a decline of 0.1 percent.

With the back-to-back declines, construction spending stood at a seasonally adjusted annual rate of $808.9 billion in February, just 6.1 percent above a low hit in March 2011 and about one-third lower than the high hit during the housing boom.

The construction weakness over the past two months underscored that the nation’s construction industry is still struggling to emerge from the 2007-2009 recession, a decline that was triggered by a collapse in housing following an unsustainable boom in that sector.

Housing construction was unchanged in February at a seasonally adjusted annual rate of $246.5 billion after a small 0.1 percent dip in January. The weakness last month came from a 1.5 percent drop in construction of single-family homes which offset a 2 percent rise in apartment construction.

Spending on non-residential construction projects dropped 1.6 percent following a 2.3 percent decline in January. The February decline reflected weakness in office construction, hotels and shopping malls.

Government construction dropped 1.7 percent to an annual rate of $281 fast cash without a hassle.6 billion with state and local building projects down 2.1 percent while spending by the federal government rose 1.9 percent..

In February, sales of new homes fell for a second straight month, a reminder that the depressed housing market remains weak despite some signs of improvement.

Sales of new homes fell 1.6 percent in February to an annual rate of 313,000. That is less than half the 700,000 homes that economists consider to be healthy. By contrast, a mild winter and three months of strong job gains have lifted sales of previously owned homes but that support has not benefited the new home market.

Sales of previously owned homes have risen more than 13 percent since July and January and February combined for the best winter of re-sales in five years, right at the start of the housing crisis.

Though new-home sales represent less than 10 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.

Builders are growing more confident after seeing a growing number of people express interest in buying this year. They’ve responded by requesting the most permits to build single-family homes and apartments since October 2008.

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A New Jersey company that manages prescription benefits has agreed to pay $2.7 million to settle an investigation into influence-peddling at California’s largest public pension fund, officials announced Friday.

The California attorney general’s office said Medco Health Solutions Inc. also has agreed to change its internal procedures.

The California Public Employees’ Retirement System did not renew a contract with Medco last year after an investigation revealed the company paid more than $4 million to Alfred Villalobos to help secure a prescription drug contract.

Villalobos is a former CalPERS board member who acted as a middleman to help companies gain contracts with the pension fund. The state attorney general has charged him with setting up a system of kickbacks to gain influence with pension fund executives.

California officials sued Villalobos in 2010, and the case is expected to head to trial later this year in Los Angeles. At the same time, federal authorities continue criminal and civil investigations.

Medco spokeswoman Ann Smith said the company is pleased the state investigation affirmed “no wrongdoing of any kind.” She said the review determined no employees violated any rules or Medco’s code of conduct no fax payday loan.

“Our retainer agreement bound Mr. Villalobos to follow all applicable laws and regulations to the work on our behalf,” Smith said.

CalPERS CEO Anne Stausboll said in a statement she was pleased with the settlement, a portion of which will be shared with CalPERS.

Medco provided mail-order prescription drug benefits for approximately 300,000 CalPERS members who were enrolled in the pension fund’s health plans between July 2006 and December 2011. CVS Caremark Corp. is now administering the benefits.

According to the state’s complaint against Medco, the health care company failed to ensure that Villalobos refrained from meeting with CalPERS board members and staff during the competitive bid process.

Under the settlement, Medco agreed it won’t “unlawfully interfere or tamper” with the competitive bidding process of any California governmental agency. It also agreed to a requirement that Medco’s directors review the case and take internal measures to prevent the same problem in the future.

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If you are a local subscriber to multiple daily deal sites, you’ve no doubt received several offers — $5 for $10 or $6 for $12 — for Joe Fassi Sausage & Sandwich Factory.

Every week it seems like another deal from this one-man shop on Sublette Avenue on the Hill pops up in my inbox. This week alone, it had deals running on Groupon and Wedeal. I would venture that this restaurant is, if not the most prolific, then at least one of the most active merchants offering daily deals in the region.

While some businesses may be reluctant or wary of offering these deep discounts, that shop seems to be a true believer.

So I decided to stop in earlier this week and check out the place. It started out as a grocery in 1926 and is now run as a sandwich shop by Tom Coll, the grandson of Joe Fassi.

“I know you hear a lot of bad stories about coupon sites,” he said after fixing a sandwich for a customer. “But it works for me. I have no complaints.”

So just how many deals has he offered?

“Oh my gosh,” he said. “I probably use 14 different sites. You see all those clipboards? That’s how we keep them all straight.”

Coll motioned to a dozen clipboards hanging on the wall behind the cash register. Each one is for a different deal site such as Deal Chicken, Eversave and Urban Dealight. Names of customers who have redeemed the offer are highlighted in a green or yellow marker. A handful of other sites he uses have computerized systems.

So why does he do it?

“We’re just so off the beaten track so we needed to find a way to market our business,” Coll said. “It’s a great way to get your name out there. Someone told me … that you need to brand your name. You do that by being everywhere.”

And this way he doesn’t have to spend much money on marketing, he added.

Since he offered his first deal through Groupon about a year ago, he estimates that he’s sold about 3,000 to 4,000 deals. Most people end up spending more than the coupon value. And about 60 percent of his customers who use the deal come back and pay full price. So overall, sales have increased about 20 percent, he said.

Daily deals may not work for everyone, Coll cautioned no fax pay day loan. You have to do the math to make sure you’re covering your costs. And it may be that it works better for him because he is a small business with fewer overhead costs, he said.

Now that he’s become a deal regular, he fields a lot of calls from other obscure sites around the country wanting to carry an offer for him.

“But you ask them how many emails they have in St. Louis and they’re like a thousand,” Coll said. “That’s not worth the time. But yeah, people come out of the woodwork.”

WE LIKE OUR TACO BELL

Taco Bell’s new “Doritos Locos Taco” — yes, that’s a taco in a shell made of nacho cheese-flavored Doritos chips — has apparently been doing quite well in the St. Louis market.

At least that’s the word from the new owner of about two-thirds of the Taco Bell locations in this area.

Marjorie Perlman, a spokeswoman for Alabama-based Tacala LLC, said the new product’s success is a sign of how well Taco Bell is received in the St. Louis region.

“Folks in St. Louis like to eat out — we like that,” she said. “And it seems like you guys are kind of risk takers when it come to your culinary choices.”

Some critics may take issue with her last point. But I guess she means that St. Louisans don’t just eat burgers — but also are willing to “branch out” to tacos.

Tacala, the largest franchise operator of Taco Bell restaurants in the nation, now owns 61 of the 90 Taco Bell locations in this region, making it the company’s largest market. The company just acquired 34 locations from Yum Brands, which franchises the fast-food chain. And a month ago, it bought Wentzville-based GenXMex Foods’ portfolio of 27 local Taco Bell locations.

“We’re primarily in the Southeast,” Perlman said of Tacala, whose second biggest market is Birmingham, Ala., with 43 stores. “We’ve been wanting to expand for awhile.”

She added that the company plans to invest in the stores it has acquired — remodeling and putting in new equipment where needed.

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China

Natural gas prices are falling again as balmy weather stretches across most of the nation and supplies remain plentiful.

Natural gas dropped 5 cents to $2.215 per 1,000 cubic feet in trading in New York. That’s the lowest price in a decade.

The price has dropped about 26 percent this year. Warm winter weather has allowed Americans to use less heat. And booming production is keeping stockpiles well above the five-year average.

Meanwhile, benchmark oil rose 20 cents to $106.54 per barrel. An increase in retail sales provided the latest sign of an improving economy. Brent crude rose 16 cents to $125.50 per barrel in London trading.

At the pump, AAA says the national average for retail gas rose less than a penny to $3.805 per gallon.

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Is the muni party over? Is the hangover about to begin?

Maybe. So, let’s take a look at prospects for one of the favorite investment havens of widows and orphans.

The past year was a lovely year for widows and orphans with money. They made more of it.

Conservative investments – bonds and dividend stocks – outshone sexier choices. And the homeliest wallflower of all, municipal bonds, turned into a star.

Long-term muni bond funds are up an average of 14 percent over the 12 months ending Thursday. Intermediate munis are up almost 10 percent and high-yield munis are up nearly 16 percent, according to Morningstar.

Those topped the one-year returns for the vast majority of stock and bond mutual funds classes. The worm has since turned, however, with domestic stocks showing higher gains over the past three months.

The question now is whether munis have run their course, at least for a while, and whether the risk-shy investor should look elsewhere.

“Few believe you can get the same kind of return as you got last year and the year before,” says Patrick Early, muni analyst at Wells Fargo Advisors, downtown. “If you’ve seen several years of upticks in munis, ask ‘Should I lighten up some?’”

Munis last year prospered on the soothing of fear. The year began just after star analyst Meredith Whitney — she who predicted the Citibank disaster of 2007 — turned prophet of doom for munis, warning of “hundreds of billions” of dollars in defaults on the way.

The muni market is dominated by mom and pop investors, not institutions. Mom and pop followed the prophet and fled for the hills.

Down went muni prices and up went yields in late 2010 and early 2011. A glut of new muni issues hit the market about the same time, pushing prices down and feeding the panic.

That turned out to be a buying opportunity. Whitney’s prophesy did not come to pass, and by mid-year, the panic had faded and munis were on a roll.

Most of the past year’s gain came from price recovery, not interest yield, as Morningstar analyst Miriam Sjoblom noted in a commentary last month. For instance, the Vanguard Long-Term Tax-Exempt fund gained 10.7 percent in 2011. But 60 percent of that was the gain in price, not interest payments.

As price went up, interest yields got skimpier. That fund now has an SEC yield of 2.5 percent (a yield defined by Securities and Exchange Commission). Its intermediate-term sister fund yields 1.8 percent.

It’s hard to imagine yields going much lower, and that limits the upside on price. Looking forward, it would seem that the best investors might expect is that skimpy interest yield. (Of course, muni interest is exempt from federal income taxes.)

Muni investors are risk-shy as a rule, and that’s also reflected in today’s market.

“Super high quality” bonds, such as State of Missouri general obligation bonds are probably overvalued, says Brian Musielak manager of the Commerce National Tax Free Fund in Clayton.

Those looking for higher yields are going to have to crawl out farther on the limb.

“You have to go down in credit quality and take some risk,” says Musielak.

And you may not get much for it. Vanguard’s High Yield Tax Exempt fund yields all of 2.94 percent, using the calculation method blessed by the SEC.

There are other worries as well. Credit rating agencies recently have been downgrading more bonds than they upgrade. That’s a minor negative, considering that muni defaults are still rare events in the investment-grade bond market.

A possible bigger worry involves supply and demand. State and local governments have been shrinking as their tax base shrivels. So, they haven’t launched a lot of new projects that would require bond financing. The supply of new bonds was a third below normal last year.

The dearth of bond supply helped hold prices up and yields down. That will change eventually, although no one is sure when.

Muni investors also share the fear of all bond fund investors – dreaded prosperity. The economy is picking up a bit, and eventually that will mean higher interest rates and lower bond prices.

The Fed predicts it will keep short-term rates near zero until 2014, although that falls short of a promise. The Fed might also use its heft to keep intermediate and long-term rates tame, as it’s done in the recent past.

Still, bond investors should be ready to hot-foot it out if the economic news gets too good.

If, after all that, you’re still interested in Munis, here are some top fund picks from Morningstar.

Among long muni funds: Fidelity Municipal Income, Fidelity Tax-Free Bond and Franklin Federal Tax-Free Income.

Among intermediate-term funds: Morningstar likes Fidelity Intermediate Municipal Income.

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