September 1, 2006
A veteran GA reporter, Editor in Chief Thomas B. Haines has written "Waypoints" for more than a dozen years.
In my nearly 21 years of covering the general aviation industry, I have been fortunate to witness a number of historic events.
Nowhere, though, have I seen such a concentration of momentous moments as this year's EAA AirVenture. Some will argue about the importance of some of these announcements, but as a longtime observer of general aviation I found that these were truly significant: Honda's entry into the very-light-jet business — in an alliance with Piper Aircraft; Cessna's unveiling of its light-sport proof-of-concept airplane; Cessna's revealing of its Next Generation Piston airplane — through three flybys; and Eclipse's provisional type certificate for its 500 VLJ. Perhaps not quite so historic, but other important news was Garmin's announcement of the G600 — an aftermarket "glass cockpit" solution for those of us flying older airplanes. On the engine front, numerous airplanes showed up behind Thielert diesel engines, and Safran Group/SMA received a supplemental type certificate to install its diesel engine on a Cessna 182. We had our editorial team at the show throughout the week. Read all about it on our Web site.
Honda has been dabbling in the jet market for more than 20 years. Many of us knew that the company had been flying a proof-of-concept airplane since 2003 in Greensboro, North Carolina, but the airplane was rarely seen and no details were available. Finally, last spring, the company was ready to lift the veil just a little and I was invited down to meet with the designer and get the first close-up look at the airplane. I reported on the experience in the August 2005 issue of Pilot (see " HondaJet: Behind the Curtain"), and the airplane visited AirVenture 2005 for a few hours — its public debut. Honda officials stressed that the airplane was just a research project and that a decision on whether to go into production had not been made.
During the past year, the company studied the market and the reaction to its sleek HondaJet. This year at AirVenture, the airplane was on display all week inside an enormous Honda tent under dramatic theatrical lighting. The airplane shared its venue with Honda generators, boat motors, motorcycles, and dirt bikes — among other gear from the global enterprise. At a large media event broadcast around the world on the first day of the show, Honda announced that it was going into production of the airplane. Many had already speculated about that announcement. The true surprise of the event was the announcement that Honda and Piper Aircraft had formed a business alliance for the project. Piper will provide sales and service support for the airplane through its dealer network. The two world-famous companies may work together on other strategies later, including sharing of engineering. More details will be released later this fall, but Honda officials made it clear that the HondaJet will be manufactured in the United States. A yet-to-be-formed Honda subsidiary will own the type and production certificates and be responsible for building the airplanes.
Piper Aircraft Chief Executive Officer James K. Bass chuckled at the flippant suggestion that Piper might buy Honda. Meanwhile, Honda officials made it clear that their company had no equity stake in Piper.
It's hardly the first time two manufacturers have agreed to work together in this manner. Japanese manufacturer Mitsubishi partnered with Mooney Aircraft in the 1970s to market the MU-2 turboprop. The French company now known as EADS Socata also partnered with Mooney in the 1980s on the TBM 700 turboprop. In fact, Mooney is the M in TBM (the TB stands for Tarbes, France, where the airplanes are made). The deal with Mooney, which also was French owned at the time, didn't last long.
Meanwhile, back in the 1960s Beechcraft partnered with French manufacturer Morane-Saulnier to sell the MS-760 Paris Jet in the United States. Again, that arrangement didn't last very long, as customer demand for the small jet — the predecessor to today's VLJs — declined.
Certification and first deliveries of the HondaJet are at least three years away. Among the many, many decisions to be made is where to produce the airplane. Piper has excess production capacity at its Vero Beach, Florida, headquarters — even after the 2004 hurricanes destroyed one of its major manufacturing buildings and heavily damaged another. The idea that Honda would buy Piper is hardly unprecedented. Piper itself has bought other manufacturers over the years — Taylor in the very early days and later Stinson. Beechcraft bought the Mitsubishi Diamond business jet and later re-badged it the Beechjet 400. Today it's known as the Hawker 400XP after Beech's parent, Raytheon, purchased the Hawker jet product line from that British manufacturer. Only a few years ago, Gulfstream purchased the Israel Aircraft Industries family of jets — the Astra and Galaxy. Today, the two fly under the Gulfstream moniker, but are still manufactured in Israel. Meanwhile, Gulfstream's parent company, General Dynamics, at one time owned Cessna. Of course, today Cessna is owned by Textron, which also owns Lycoming engines — the primary powerplant used not just by Cessna, but also by Piper and others. As you can see, the six-degrees-of-separation hypothesis holds true among aviation manufacturers as well.
But, you might ask, why would Honda need Piper? After all, Honda, which frequently has the top-selling automotive model in the United States, certainly knows a little about how to build stuff. And state and local governments never seem to run out of tax incentives to lure aircraft manufacturers to their locales. Vero Beach, meanwhile, has not exactly been welcoming to Piper in recent years — or other aviation companies. The retirement community likes its peace and quiet, thank you very much.
Although other jet manufacturers — and some piston-aircraft manufacturers — have chosen to sell their aircraft factory-direct, Honda believes its HondaJet should be sold through dealers. Michimasa Fujino, vice president of Honda R&D Americas and the designer of the HondaJet, told me that he believes the customer experience can be better for a personal jet sold through a dealer. Citing Honda's success selling autos through dealer networks, Fujino notes that an individual dealer has good motivation to sell the jet and then the profit is shared — a concept very much in line with the company's philosophy that it is in the business to create wealth not just for itself but also for others associated with it. Honda hopes to help Piper upgrade its dealers, which should be good news for the dealers. The affiliation also solves the problem of Honda having to build a service network. As other start-up manufacturers such as Eclipse, Columbia, Cirrus, Adam, and Sino Swearingen will tell you, building a service network is a monumental task and customers expect a service center in their area from day one — even if they are the first customers in the region.
Given the desire for an established dealer and service network, Piper, with its 80 sales and service centers worldwide, is then the logical affiliate. Cessna and Raytheon have products that compete with the HondaJet. Other jet manufacturers with established service networks, such as Dassault Falcon and Gulfstream, sell factory direct. Mooney, although going great guns these days and introducing new models right and left, is only a couple of years out of bankruptcy and still struggling to modernize its manufacturing processes and re-establish its own service network (see " Muscle Mooney," page 72).
It will be interesting to see how this historic announcement plays out over the next few years. Discussions between Honda and Piper have been under way for about a year, Bass told me. "In time, the industry will come to see the significance of this announcement," he predicted.
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Links to additional information about the HondaJet may be found on AOPA Online.
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