Signal Aviation, an aircraft sales and service company at Lebanon Municipal Airport, said yesterday it will stop selling airplanes as of next year.

Signal will not renew its dealership agreement with Kansas-based Cessna Aircraft Co. because of the slowing economy, a drop in sales and some changes that Cessna has made to its sales territories, according to Greg Soho, Signal's CEO and vice president. Signal will continue to fuel and maintain aircraft, and operate its flight school.

One employee - a sales manager - will leave the staff of around 20 full- and part-time employees at Signal, Soho said. He characterized the move as "a difficult decision" that "was not made lightly."

"We were looking at this over the course of the year," Soho said. "Any time you have to terminate an employee, that's never a fun thing to do."

Signal is liquidating its inventory of planes before the agreement terminates at the end of the year, Soho said. The company has sold Cessnas since 2000 as the exclusive dealer in Vermont and northern New Hampshire, Soho said. Cessna recently combined those territories with Maine, Massachusetts and Rhode Island, and awarded the sales agreement to another dealer with whom it had a 50-year relationship, he said.

Cessna spokesman Doug Oliver confirmed his company was "adjusting to market demand" by consolidating some of its sales territories.

The aircraft manufacturer has adjusted its production lines, laying off 500 employees in Kansas and 160 at a plant in Oregon, Oliver said. Last year, Cessna built more than 800 of the single engine piston aircraft like those offered through Signal. This year, that dropped to 700.

Airplane sales had steadily declined at Signal for the past two years, Soho said, and accounted for 40 to 60 percent of the business. Planes typically sold for between $260,000 and $500,000. Buyers tended to be a mix of entrepreneurs and individuals, Soho said. Declines in the stock market may have taken a toll on customers' finances, persuading them to put off big-ticket purchases for another time, Soho said.

Oliver also blamed the poor economy for the drop in sales.

"People are a little skittish to over-commit their discretionary income, $500,000 for a vehicle that may be recreational," Oliver said. "It's just purely a result of where we are in the economic downturn."

Signal could have continued to sell used planes, but Soho said the company chose instead to refocus on maintenance and fuel sales. It will continue to work on Cessna aircraft and operate Cessna Pilot Center, he said.

"We value our relationship with Cessna," Soho said.

There will be no direct revenue loss for the cash-strapped Lebanon airport, according to Jay Fitzgerald, operations supervisor at the airport. However, he said the airport would still be affected. Dealerships like those with Signal and Sharkey's Helicopters bring foot traffic to the airport, he said. It would be similar to a shoe store leaving a mall, he said.

"The intangibles definitely make a difference," Fitzgerald said. "It's unfortunate. We hate to see it happen."