“"Many years ago, our company founder, Al Conklin, sold a new twin-engine business aircraft to a very successful entrepreneur. He had established a bit of a rapport with the individual and, after the sale, asked him straight out, 'How can you justify the cost of this airplane?' His reply? 'What is the cost of a divorce?'"–David Wyndham, president, Conklin & de Decker”
Honda's Big Bet
If Honda Aircraft founder, president and chief visionary Michimasa Fujino is right, when you step into one of his dealerships to put down a deposit on a HondaJet or get yours serviced, your experience will be a lot more like visiting an Acura dealer than a traditional business jet manufacturer.
Such manufacturers specialize in building airplanes, not running dealerships, and in Fujino's view, they make a mistake by not leaving sales and service to experts in those fields. Aircraft manufacturers, he believes, should focus on designing and building models that will attract buyers and assign the sales and service to a motivated dealer network. An auto dealer, he likes to point out, is an entrepreneur who has invested financial and sweat equity in his business, and that investment won't pay off unless he delivers an outstanding experience to the customer.
Fujino has worked at Honda for more than two decades, having joined the company after graduating from college in 1986 with an aeronautical engineering degree. He appreciates Honda's culture, especially when it comes to selling products like Acura luxury cars to high-net-worth customers. In fact, the Acura business model fits so well with Fujino's plans for HondaJet that he tapped Acura's top marketer, Doug Danuser, to run Honda Aircraft's sales and marketing operation.
Honda in general and Honda Aircraft in particular are not trend followers, and Fujino knew that for a new business jet to succeed it would have to be different enough to attract attention; stamping the Honda name on an ordinary jet wouldn't suffice.
In the mid-1990s, Fujino began wondering why typical business jets have engines mounted on the aft fuselage. Engine installations require structure and systems, which take up space. "If I could eliminate all this structure and all the systems and put them outside [the fuselage]," he said, "we could maximize inside space without increasing the size of the airplane." Fujino explored numerous engine-mounting schemes, and one configuration stood out as a possible efficient alternative: engines mounted on pylons attached to the upper wing.
The over-the-wing configuration turned out to deliver a bonus besides increased cabin space-a remarkable 5-percent improvement in efficiency. What Fujino discovered is that the over-the-wing engine design delayed the onset of high-speed drag so much that the jet could fly efficiently at a faster speed. "It was very exciting," he said.
Here is where Honda further departed from how people typically launch a business jet manufacturing company. Not only did Honda build and fly a prototype jet that was aerodynamically and structurally almost identical to the finished product, but a separate group of experts at the company manufactured an engine for it from scratch. This effort turned out so well that General Electric later formed a 50-50 partnership with Honda to design, build and market an upgraded version of the engine; the resulting GE Honda HF120 is the engine that powers the market-bound HondaJet.
In nearly every case of new companies entering the jet market and even existing manufacturers building new jets, the process is opposite from how Honda joined in. The manufacturer usually begins with conceptual designs, releasing enough projected performance information to encourage buyers to plunk down cash for a position on the future assembly line. The difference between an existing manufacturer like Cessna and a new entrant is that Cessna has a track record while the new manufacturer can offer only promises. Honda could have put itself in the same position, but chose instead to build, test fly and validate the HondaJet's performance and capabilities well before offering it to the market.
First flight of the prototype HondaJet occurred on Dec. 3, 2003, and it wasn't until July 25, 2006, that Fujino announced that the HondaJet would be developed commercially. A few months later, at the National Business Aviation Association's annual convention, Honda Aircraft began taking orders for the $3.65 million jet. Buyers quickly placed deposits on more than 100 HondaJets; Fujino has chosen not to reveal how much that number has grown since then.
What Fujino has announced is the identity of the five dealerships-all of which are also Piper Aircraft dealers-that will sell, deliver and service new HondaJets in the U.S. Honda has picked dealers in Canada and Mexico as well and it named its first European dealerships in May. They are located in Germany, Spain and the UK. The goal is to have the U.S. dealerships ready to serve customers as soon as the first HondaJet rolls off the production line in 2010. European deliveries are to begin in 2012.
Honda Aircraft is presenting a united marketing front to potential buyers. The five Piper dealerships are well known by other names, for example: HondaJet Northwest is a Million Air-franchised fixed-base operator (FBO) at Salt Lake City International Airport and HondaJet Southwest in Phoenix is the headquarters of the Cutter Aviation FBO chain. All the dealers are building dedicated facilities for HondaJet sales and service, making them seem more like standalone Acura dealers than FBOs.
Portsmouth, N.H.-based aviation management consultant Bill Quinn has worked with every major business jet manufacturer and appreciates that Honda is attempting to change the way jets are delivered. "While the certification and delivery into service of new aircraft products are always big steps, particularly in today's regulatory environment," he said, "the true test for any new aircraft will always be the ability of the manufacturer to service and support the product once it enters service.
"I give Honda good marks for what they have put together so far from a sales, service and support perspective," Quinn added, "but they still need to gain market confidence. To accomplish this, they will need to keep chipping away at the milestones they have set for themselves; fully implement all of their sales, service and support strategies; and deliver a minimum of 300 aircraft in five years. If they can achieve all of their goals, I think that will be a true indicator that Honda has gained the market's confidence."
The HondaJet, with its unique design and network of dedicated dealers/service centers, represents something new in aviation. If Honda's massive investment in the aircraft pays off as well as the company hopes it will, don't be surprised to see other aircraft manufacturers trying to copy its techniques.