Bloomberg News

HondaJet Stalls Again With One-Year Delay to 2013 on Engine Redo

October 10, 2011

Oct. 11 (Bloomberg) -- Honda Motor Co. suffered a new setback to its HondaJet small aircraft as engine damage forced a redesign that will delay the first delivery until mid-2013, almost a year later than the previous schedule.

Ice ingested during ground testing caused “very minor damage” and a slight loss of thrust, Honda Aircraft Co. President Michimasa Fujino said yesterday at the National Business Aviation Association convention in Las Vegas. General Electric Co. is Honda’s partner on the engine.

The postponement pushes back the HondaJet’s commercial debut from 2012’s third quarter, which already was later than Honda Aircraft once expected. In 2009, the Greensboro, North Carolina-based unit said difficulties in receiving parts meant that the first delivery would slide to late 2011 from 2010.

“I regret that we have to convey this message today,” Fujino said at a news conference, adding that the unit of Tokyo- based Honda had already informed customers of the postponement.

The HF120 engine now won’t be certified until 2012’s second half, and tests can then start on the whole plane, said Fujino, who first sketched out a jet design in 1997 before forming Honda Aircraft in 2006. The company has sold more than 100 HondaJets, he said. The plane’s first flight was in December.

“The business-jet market is a little slow right now, so the impact on sales is minimal, because the market won’t recover until 2013,” Fujino said in an interview. He declined to say what the financial impact of the delay will be.

Engine Testing

GE, the world’s biggest maker of jet engines, said Oct. 9 that testing on the Honda unit was 70 percent complete.

Honda has pushed the jet to win a share of what it expects to be a growing market for light planes able to use runways too short for larger commercial and business aircraft. The HondaJet will seat as many as two crew members and six passengers, depending on the configuration, according to the company’s website. Honda lists the price as $4.5 million.

Fresh delays on the jet add to Honda’s setbacks this year. Japan’s third-largest automaker is struggling to reverse falling sales of Honda and Acura brand autos in the U.S., its biggest market, after the March earthquake disrupted shipments of parts and slowed production for five months. Honda rose 3.4 percent to 2,300 yen at 9:03 a.m. in Tokyo.

Honda, the world’s largest producer of motorcycles and engines, sought to enter the aircraft business for decades to fulfill a goal of founder Soichiro Honda, who died in 1991.

Engineering Challenge

“Honda is an engineering company,” said Ed Kim, an auto- industry analyst with AutoPacific Inc. in Tustin, California. “They’re not afraid of engineering new and different kinds of things. What could possibly be more challenging than a jet?”

The company clearly wants the plane to act as a kind of halo for its engineering abilities, said Kim, who noted the plane appears in an advertisement for the carmaker’s Accord sedan.

Honda is spending more than $120 million on the North Carolina site and more than $1 billion on research and development of the jet.

“Given how much they’ve invested into it so far, perhaps they are too deep in to pull out now,” Kim said.

Honda Aircraft said yesterday that it will expand its headquarters in Greensboro, with a $20 million HondaJet maintenance, repair and overhaul facility that will add 419 more jobs.

--Editors: Ed Dufner, Stephen West

To contact the reporters on this story: Susanna Ray in Las Vegas via sray7@bloomberg.net; Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

To contact the editors responsible for this story: Ed Dufner at edufner@bloomberg.net; Jamie Butters at jbutters@bloomberg.net


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