Volato Orders 25 HondaJet Elite IIs In Dramatic Turn

How about a bit of drama, a plot with twists, turns and surprises? Call it the Real CEOs of HondaJet Operators. Two weeks ago, Glenn Gonzalez, the CEO of Jet It, the largest HondaJet operator, blasted the manufacturer for support and reliability he described in an email to customers as “shocking,” “disappointing,” and “grossly inadequate.”

Of course, one person’s problems are another’s opportunities.

Yesterday, Honda Aircraft Company (HAC) gained what is believed to be its biggest sale, a firm order for 25 of its Elite II very light jets to Volato, another fractional jet program.

The Atlanta-based operator expects to have 17 HA-420s in its fleet by year’s end, with deliveries from yesterday’s order starting in 2023, eventually making the upstart the largest operator of the type with ambitions to grow even more.

Based on a list price of $6.95 million, the order has a retail value of $174 million.

It was the second significant fleet order of the week, following Bombardier’s announcement that NetJets is the launch fleet customer for its extended range Global 8000 with an order valued at $312 million, covering just four of the ultra-long-haul private jets.

Volato Co-Founder and CEO Matt Liotta tells Forbes, “We have more demand that even this order can satisfy. If Honda would sell us more jets, we would buy more. We would have liked more.”

In the meantime, Liotta says he is scouring the preowned market to add to his fleet. He previously said he would also buy any of the very light jets Jet It doesn’t want. “If Jet It can’t, or won’t, offer reliable HondaJet service, we are happy to welcome their HondaJets into our fleet to provide those owners our excellent service,” Liotta told us when we first broke the story about Jet It’s discontent.

A spokesperson for HAC, commenting on its big order, says, “We are very excited about Volato’s long-term commitment to our platform and their continued interest in expanding their fleet with the HondaJet Elite II. We look forward to extending our relationship.”

Gonzalez, who worked as a sales manager for HondaJet before setting up Jet It in 2018, shellacked his former company in an email to his shareowners, pitching them to move to a new Embraer Phenom 300 offering.

Gonzalez wrote, “For nearly two years, we have done our best to shield you from Honda’s ineptitude, but our shield has worn through. Even though Honda has not met its obligation to us, our obligation to you – to fly you even when your Honda is not – has had our new company absorb over $20 million in ‘off fleet’ expenses in the last two years.”

Since customer contracts guarantee availability, the operator must charter aircraft to fly those customers when its fleet isn’t available, often costing significantly more.

Calling the OEM’s support “grossly inadequate,” he added, “The days of not having enough flyable aircraft causing you schedule anxiety, late notifications, flight delays, and cancelations must end, and the Embraer Phenom 300 is the solution.”

At the time, the HAC spokesperson responded by saying its entry into the private jet arena has a 99.7% dispatch rate, adding availability “may be influenced by multiple factors associated with a customer’s operations, such as extended downtimes due to accidents, incidents, pilot, technician availability, maintenance planning, and scheduling, and service center network coordination.”

Three of Jet It’s HondaJets have been out of service for undetermined periods this year after runway excursions, although Gonzalez says that downtime was excluded from the analysis he provided to owners.

For his part, Liotta says talks for the new order, Volato’s third with HondaJet, were underway before Jet It’s discontent became public.

In a press release announcing the order, Volato said of its new flagship, “The HondaJet Elite II model is one of the most technologically advanced, eco-friendly, and economical aircraft on the market: setting new standards in fuel efficiency, performance, comfort, and technology. With an expanded range, higher gross weight, and additional fuel capacity, users will enjoy greater mission capability and more flexibility than ever before.”

The order for Elite IIs gives Volato a version that adds approximately 100 nautical miles to its range over the Elite S and several hundred miles of additional range compared to the earliest versions. Liotta says it will open up more nonstop flying between the Northeast and Florida, one of the busiest corridors for private aviation in the world.

While the order is a big win for Honda, which features the airplane in its corporate advertising, Volato will now have to convince prospects that the issues facing Jet It customers were the fault of the operator and not the airplane.

For his part, Liotta says he has been satisfied with the support from the OEM and its service centers, and there is “a very strong relationship.”

He says Honda is working to reduce the time aircraft are down for scheduled maintenance and has been receptive to feedback, even incorporating suggestions into upcoming enhancements.

So far, Volato is also sticking to its current structure, which charges repositioning fees for flights beginning more than two hours away from one of its bases, which currently span from Baltimore and Atlanta to Florida and west to Houston and Carlsbad, California.

Commenting on the order, Michael Riegel, a consultant and former Flexjet executive, noted for small jets, “Revenue legs are typically under 90 minutes,” while another industry executive adds, “You open yourself up to customers who are flying from North Dakota to South Dakota. On each side, you probably have two hours of repositioning. If you are selling one-way pricing and only charging for occupied hours, you are eating those costs.”

For Volato, Jet It may have provided the best ammunition to help it close deals. Despite the harsh language, Gonzalez says he will continue to operate HondaJets, using them as the backbone of a plan to expand his on-demand charter business.

Gonzalez also seems to have softened his stance. In an interview with Aviation International News published hours before Volato’s order was announced, he told the publication, “I love the airplane. It’s a great airplane…We expect to continue to operate the airplane as long as our customers are happy with the airplane.”

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