Develop Jet Aircraft, Honda Spend 1 Billion US Dollars

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Honda Motor Co. spent a cost of 1 billion dollars for the development of Honda jet aircraft since the early 2000s. This figure is two times larger than a similar jet development that normally drain the funds of about 400 million dollars.

Richard Aboulafia, vice president of Teal Group, a consulting company that analyzes the aviation industry, said the plane late delivery time of five years and establish itself GE Honda HF120 engine, inflating the cost of the development. Honda declined to confirm the Teal Group estimates but Japanese automotive company has been researching the development of jet aircraft since 1986.

Honda
The company had previously successfully revolutionized the family car in the US in the 1970s. Jet Honda are expected to be sold for 4.85 million dollars per unit is a six-seat business aircraft that is able to cover a distance of 2,185 km and reaches a maximum speed of 777.3 km per hour. Jet Honda became the first commercial aircraft made Honda Motor Co. since World War II.

Jet Honda began to be sent to the consumer end of 2015 and the price is slightly higher than its competitors in the light business jet segment conservative. "The biggest mistake ever made by the time of entry in the aircraft business is (to think) that the cash drain on the company will end after the start sent a plane," said Aboulafia. "Often, the cost increases," he said, mentioning the production and marketing costs are also soaring.


Fujino, Honda Aircraft Company's CEO, said the party takes five years to start generating profits. While Aboulafia believes Honda takes longer to close a sunk cost. "If Honda got a miracle, can result in a profit of 1 million dollars per plane, then they have to sell 1,000 aircraft, after they made 100 aircraft that are not profitable," he said.

Jet project relies on Honda's inside pocket. Honda net profit in 2016 of about 3 billion dollars, or three times larger than Textron, maker of Cessna Citation jets M2.Honda hope this project will have intangible benefits.


Namely polishing Honda brand image to win back market share in the North American car, which slipped below 10 percent in recent years. Jet while utilizing the technical expertise to improve the efficiency and performance of the car of the future.  

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