The Story of Jet It Grounding Its Fleet of HondaJets

Jet It, a fractional business jet operator based in Greensboro, North Carolina, launched in 2018 and quickly became the 11th largest operator in the US based on charter and fractional flight hours, according to Argus TRAQPak data. On May 18, 2023, Jet It grounded its fleet of HondaJets citing safety concerns and shortly thereafter ceased operations. But what led to this drastic decision?

The Incident

The grounding followed an accident involving a HondaJet HA-420 model, owned by Upfrunt Services LLC, which hydroplaned off the runway in Summerville, South Carolina. The aircraft hit a berm and caught fire. Fortunately, all five people on board were unharmed, but the aircraft sustained significant damage. The National Transport Safety Board was called in to investigate the incident.

The Grounding Decision

Jet It voluntarily grounded its fleet and informed its staff of the decision after the accident. They issued a statement:

“We are instituting a safety stand-down whilst we request further information from Honda. This means we will not be operating the Honda Aircraft until further notice. During this stand-down, we will be reviewing all information, procedures, and specific data as it becomes available.”

No date was given for the resumption of operations. Jet It communicated the decision to stakeholders, emphasizing that the grounding was a company decision, not mandated by aviation authorities or HondaJet. Honda Aircraft Company stated:

“Jet It’s decision to ground their HondaJet fleet was made independently by Jet It. Importantly, neither Honda Aircraft Company nor any aviation authority has recommended this grounding. Therefore, we have no comment about the decision by Jet It to ground its fleet.”

Safety and Legal Issues

Just weeks before the grounding, Jet It settled a breach of contract lawsuit with Honda Aircraft Company. The lawsuit alleged that Jet It had violated their agreement by making disparaging comments about the manufacturer and selling one of the jets to a private buyer, which was against their agreement.

The incident in Summerville was the eighth runway excursion or overrun by the HA-420 in a year. Despite this, Honda Aircraft Company and the HondaJet Owners and Pilots Association (HJOPA) maintained their support for the jet. Honda assured they were actively supporting the investigation and reiterated their commitment to the aircraft’s safety and reliability. HJOPA advised members to continue flying while emphasizing the importance of proper planning, training, and landing procedures.

Financial Troubles and Operational Challenges

The timing of the grounding coincided with significant financial struggles within Jet It. An investor presentation revealed plans to shift to the Embraer Phenom 300 and projected a loss of $23.2 million in 2022, following a $2.6 million loss the previous year.

CEO Glenn Gonzales criticized Honda Aircraft for poor service and support, blaming them for fractional owners’ lack of aircraft availability. Ironically, Gonzales had previously worked as a salesman for Honda Aircraft and had praised the HondaJet’s engineering. Jet It also had a reputation for late payments to HondaJet Service Centers, causing operational delays.

Jet It’s business model, which offered flights to owners at unsustainably low rates, further strained its finances. Charter brokers were chartering flights at $5,000 per hour, and some contracts prevented Jet It from adding a mandatory fuel surcharge. Rumors circulated that Jet It’s main hangar was inaccessible due to unpaid rent and that the company owed Honda Aircraft $1.6 million. Half of their fleet was in maintenance with unpaid debts accumulating.

Conclusion

The grounding of Jet It’s fleet of HondaJets, ostensibly due to safety concerns, appears to have been a façade for deeper financial issues. The company’s sudden service disruption raised suspicions, leading some to believe it was a negotiating tactic to revise fractional contracts under ‘force majeure.’ In the end, it seems financial instability, rather than safety concerns, was the primary cause of Jet It’s downfall.

“The problem is that the safety issue doesn’t appear to be the cause of Jet It’s sudden service disruption – but cash does.”

Sources: AirGuide Business airguide.info, bing.com, simpleflying.com