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Honda starts jet engine output as it pushes into aviation business

Kyodo

Honda Motor Co. began manufacturing engines Wednesday for its HondaJet small aircraft at a subsidiary in Burlington, North Carolina, and expects certification by the U.S. Federal Aviation Administration in the first quarter of next year.

The HF120 turbofan engine, developed jointly with U.S. electric equipment giant General Electric Co., is touted as being roughly 10 percent more fuel-efficient than competing engines of the same class and represents a major enhancement of the HondaJet’s capability.

With capacity to build 500 engines per year, Honda also wants to supply some units to Sierra Industries Ltd., a U.S. aircraft maintenance company, in the hope of taking advantage of economies of scale.

Masahiko Izumi, president of Honda Aero Inc., the subsidiary tasked with engine production, said at a ceremony marking the start of production: “We would like to gradually expand our operations and eventually broaden the range of engine products we can offer.”

North Carolina Gov. Pat McCrory welcomed Honda’s engine production, saying, “I look forward to a day in the very near future when North Carolina-made HondaJets and GE Honda jet engines will be in the hands of customers around the world.”

The engine production is an important step forward in the automaker’s plan to stretch into the aircraft business with its HondaJet, an enterprise conceived by the company’s late founder, Soichiro Honda.

The company hopes its small jet will become a core profit-generating business along with automobiles and motorcycles, but a host of challenges still have to be solved before the undertaking can take off.

“This is significant for the business jet industry, because Honda is the only company to make both the plane and the engine that powers it,” said Honda Senior Managing Officer and Director Yoshiharu Yamamoto.

The HondaJet can seat seven, including the pilot, and carries a price tag of $4.5 million. Honda has received orders for more than 100 on the back of solid demand from corporate executives and wealthy individuals.

Globally, around 680 small jets were delivered in 2013. The market has been growing an annualized 5 percent on average in the past two decades. Demand is expected to expand in emerging economies in Asia and Latin America. Sales are projected to grow to 1,530 planes in 2030, according to one estimate.

While seeking to raise its name recognition in the small jet market, Honda also aims to build up the engine business.

“We would like to make it profitable on an annual basis by 2020,” Director Atsukuni Waragai said of the engine division.

The aviation engine market is hard to crack amid the presence of major builders such as Pratt & Whitney. Honda will also be selling its engines to competing aircraft manufacturers. Potential sales targets include companies like Cessna Aircraft Co. of the U.S. and Embraer S.A. of Brazil.

“It’s true that we are being watched with suspicion,” said Honda Aero chief Izumi.