Form Strategic Alliance in the Business Jet Engine Market
We've been hearing some rumors for a while now... which turned
out to be true. Honda Motor Co., Ltd. and General Electric Co. (GE)
have announced the formation of a strategic alliance to produce a
new jet engine for light business jets. The basic agreement was
signed Sunday (2/15) at Honda Motor headquarters in Tokyo, Japan,
by Takeo Fukui, President and CEO of Honda Motor, and David
Calhoun, President and CEO of GE Transportation, a business unit of
GE. GE is headquartered in Fairfield, Connecticut, USA.
The agreement establishes the framework under which Honda and GE
will further develop and certify Honda's new HF118 turbofan
jet engine. Honda launched its jet engine and aircraft
project in 1986, and has been developing the lightweight HF118
engine, in the 1,000- to 3,500-pound thrust class, since 1999.
The HF118 has run more than 1,400 hours, including ground tests
and more than 200 hours in flight tests on an existing test
aircraft. In addition, two HF118 engines have powered Honda's new
experimental compact business jet, the HondaJet, in flight tests
that began in December 2003.
The Honda/GE basic agreement includes: joint certification of
the HF118, joint marketing activities under both companies' joint
brand with airframe manufacturers, and continued discussions on the
business structure under which the two companies will mass produce
the engine. Honda and GE have been in discussions for more than a
year, and expect to sign a formal definitive agreement later this
year.
"We have great respect for the technology, design and
performance built into Honda's HF118 engine," said GE's Calhoun.
"There are tremendous benefits to Honda and GE entering the
business jet engine market together. Honda is the world's leading
producer of engines for motorcycles, automobiles, and power
products with superb technology. We are delighted to form a
strategic alliance."
"This is a great step forward for Honda to enter the aviation
business, which has been a dream of the company since its
creation," said Honda's Fukui. "We aim to commercialize our compact
jet engine business by merging mutual strengths: Honda's HF118
turbofan engine technology, and GE's technology, sales, and support
through a spirit of equal partnership. We are confident in forming
an alliance with GE, which is the leading manufacturer in the jet
engine industry."
Honda and GE note that the emergence of smaller, relatively
inexpensive business jets, which seat from four to eight
passengers, create the potential for considerable engine sales for
future business and personal travel. Honda and GE envision an
annual market in the future for approximately 200 or more of these
business jets. Small business jet applications include owner
operators and fractional owners, as well as potential "air taxi"
operations. The "air taxi" business involves micro-jets flying
passengers on short hops, using the vast number of small airports
not serviced by major airliners.
Jet engine technology is also driving market change. In the
1990s, GE took its jet engine designs for large airliners to
regional jet passenger aircraft, an arena previously dominated by
propeller-driven and turboprop aircraft. Now, Honda and GE plan to
bring their expertise to a new generation of smaller, lightweight,
low-cost, and highly efficient turbofan jet engines with low
operating costs.
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