Honda Set to Storm Market for Small Business Jets

The $4.5-million HondaJet is being certified for commercial sale beginning in early 2013 as Honda Motor Company prepares to become a giant in the market for small business jets.

Honda began taking orders for its seven-seat executive jet in 2006 and boasts a backlog of about 250 orders. By the first half of 2013 it expects to be producing HondaJets at the rate of 80 a year at its North Carolina subsidiary Honda Aircraft Company.

Honda’s promise to build jets that are quieter, 20% more fuel efficient and save 33% on operating costs won it 100 orders for HondaJet in the first three days after it was announced in 2006. It has since taken in about 150 additional orders through its nine dealerships in North America and Europe.

“I’m very optimistic about our prospects,” said Honda Aircraft CEO Michimasa Fujino Monday at Honda’s Tokyo headquarters. Michimasa kicked off Honda’s efforts at developing a business jet 1986. He is targeting the 200 orders a year currently being served by Cessna and Embraer SA.

“We’re doing with HondaJet what the Civic did to American cars from the 1960s. Our competitors are still producing with technology from the 1990s,” said Fujino.

Ironically the engine for HondaJet will be made in a joint venture with General Motors, one of the American auto behemoths that Honda helped to humble when its Civic joined the Japanese compact invasion in 1976.

Honda is promising operational costs of $1,000-$1,200 an hour for the HondaJet compared with at least $1,800 by the competition. The HondaJet would essentially expand the market for small business jets by allowing groups of five or six executives to travel more cheaply and more efficiently between small cities than on commercial flights. Fujino also hopes to capture the low end of the mid-size jet market as many companies are looking to cut costs as fuel prices continue rising.

Honda Aircraft has picked a good time to debut its small jet market. Not only are N. America and Europe slowly emerging from the economic crisis of 2008, China, India, Brazil and the Middle East have attained a critical mass of business people who want the convenience of operating their own jets. The demand for that segment is likely to double by 2018, according to industry analysts.

Honda Aircraft plans to ramp up its work force to 1,000 during the first half of 2013 from the current level of about 650. Fujino hopes to make the unit profitable by 2018.