| TOKYO, March 27
TOKYO, March 27 After three decades building an
airplane from scratch, Michimasa Fujino, 56, chief engineer of
the Hondajet, might have to reach a ripe old age to see Honda
Motor Co's pet aviation project recoup its development
Honda has declined to reveal the costs, but the automaker
has been researching aircraft development since 1986, and
Richard Aboulafia, vice president of analysis at aerospace
consulting firm Teal Group, thinks it has likely spent roughly
$1 billion on the jet programme since the early 2000s - more
than double the $400 million typical for similar jets.
A five-year delivery delay and developing its own engine
bumped up the bill.
The company that gave the world the Honda Civic, which
revolutionised compact cars in the United States in the 1970s,
is betting its $4.5 million dollar, six-seater light business
jet, the first aircraft developed by an automaker since World
War Two, will expand the fuel-efficient private jet market.
The jet began deliveries in late 2015 and is priced slightly
higher than competitors in the conservative light businessjet
"The biggest mistake people make when getting into the
aircraft business is (thinking) that the cash haemorrhaging ends
once you start delivering aircraft," said Aboulafia.
"But very often, it increases," he said, citing marketing
and production ramp-up costs.
Fujino, CEO of Honda Aircraft Company, has said he expects
it will take at least five years to start generating profits,
and Aboulafia thinks it could take much longer to recoup sunk
"If they, miraculously, can generate $1 million in profit on
each aircraft, then they need to sell 1,000 planes, after they
build the (first 100 or so) aircraft that are unprofitable," he
The project has depended on Honda's deep pockets. The
automaker's net profit for the 2016 financial year was around $3
billion, more than triple that of Textron, maker of the
rival Cessna Citation M2 jet.
Honda hopes the project will have intangible benefits -
varnishing its brand image to claw back automobile market share
in North America, which has slipped below 10 percent in the past
few years, and leveraging jet-engineering skills to raise the
efficiency and performance of future car models.
NO TRACK RECORD
Fujino acknowledges that customers, particularly first-time
buyers, may need convincing.
"We want to show customers that even though we don't have a
history of selling aircraft, we're in the market because we have
something new to offer," he told Reuters in an interview.
"For us that's more important than having a track record."
Businessjet operators have shown interest, as it would offer
an upscale alternative to turbo prop jets, often used for small
"The Hondajet would provide a new product for that segment,
which is now mostly rattling around on old turbo props," said
Richard Hodkinson, vice president of aircraft sales and
acquisitions at aircraft services operator Clay Lacy Aviation in
Van Nuys, California.
"It wouldn't be bigger than a turboprop in terms of the
cabin, but it would be new, it would be quiet, it would be more
efficient, and you'd be in a jet."
To sell the jet, Honda, which is targeting wealthy
individuals and business owners, has taken a page from the auto
industry playbook, establishing a dealership network across the
Americas and Europe, though it plans to sell directly to fleet
"The car dealership model works for achieving high-volume,
localised sales. The model may not be perfect, but Honda U.S.
car sales have expanded by leveraging the strengths of the
dealer system," said Fujino.
Some think that could be a mistake.
Established makers often sell directly to customers and
offer maintenance and parts services through their own sales
outlets, which takes time and resources to establish, but
enables them to control quality and consistency of service.
"You can't transfer the dealership model from the auto
industry to aircraft," said Aboulafia. "You're sending a message
that you're not going to be a big player ... If they want to
develop a family of products and really get out there and be a
force in the market, then it's a missed opportunity."
LABOUR OF LOVE
Unlike the cheap-and-cheerful Civic, the Hondajet is
marketed like an expensive sportscar, presented on a slowly
rotating platform in the company's delivery room, a pristine,
high-ceilinged hangar at its headquarters in Greensboro, N.C.
"The Hondajet is meant to evoke the image of being the
sportscar of business jets. We wanted it to have the 'wow'
factor of a beautiful car," Fujino said late last year.
The jet has been a labour of love for Fujino, who confounded
industry colleagues with the craft's engineering masterstroke:
engines mounted on the wings, not the fuselage, which reduces
cabin noise and makes space for a full-sized washroom, a first
in its segment.
He also says he found an aerodynamic sweet spot for the
engine placement, helping the jet use an average of roughly 15
percent less fuel than rivals, which include the Phenom 100,
made by Brazil's Embraer SA, and the Citation M2, its
In the delivery room, Fujino obsesses over every detail of
presentation, angling the lighting to highlight the contours of
the aircraft's softly pinched nose, inspired by a Ferragamo
He often personally hands over the keys to new owners and
says he intends to keep that up even as annual production rises
from around 25 now to perhaps 80 in the coming years, nearly
double the Citation M2, according to Teal estimates.
"I know the faces of all of our current customers," he said.
($1 = 113.2600 yen)
(Reporting by Naomi Tajitsu and Maki Shiraki; Editing by Will