Fractional HondaJet Operator Jet It Shuts Down After Grounding Its Fleet

Jet It, the 12^th largest U.S. private jet operator measured by fractional and charter flight hours, is shutting down after grounding its fleet a week earlier.

According to Flying magazine, the HondaJet operator told employees their jobs were permanently terminated late yesterday.

The report also said the company was closing, although no bankruptcy was mentioned.

Glenn Gonzales, the CEO of Jet It, replied to the story by saying, “Following the response received from Honda, we needed to give people the chance to receive federal benefits while we work with them to determine a path forward.”

The possible end came one week after the relatively new player – it launched in 2018 – had grounded its fleet of HondaJets, citing safety concerns following a series of runway excursions, including three by aircraft that were part of its program.

In a call with its fractional owners during the week that included the owner of Flying, who is a customer of the program, Gonzales continued to cite safety concerns.

However, as the days passed, questions about Jet It’s financial health before what he termed a safety stand down started to emerge.

Last October, Private Jet Card Comparisons reported an investor presentation outlining a move to Embraer’s Phenom 300 platform, projected the company would lose $23.2 million in 2022 following a $2.6 million loss in 2021.

Posts on the job website Glassdoor told of company credit cards being declined and calls from vendors looking to be paid.

The news of Jet It’s potentially final landing by Flying CEO Craig Fuller told a tale of airplanes being held by repair shops due to unpaid bills, that the company had been locked out of its primary hangar after falling behind on rent, and that the operator owes Honda Aircraft more than $1.6 million.

Speaking earlier today, Gonzales disputed the characterization about hangar access. He said, “Airport access was returned to the hangar owner in conjunction with the furlough as the airports are controlled areas.”

Gonzales’ explanation of Jet It’s decision to ground its HondaJet fleet for safety concerns following an accident the day before in South Carolina by a private owner immediately raised eyebrows.

The runway length and conditions would not have allowed operators like Jet It, which flies under Part 135 rules, to land. In other words, it would have needed to divert.

Jet It has been at odds with the OEM publicly since Gonzales wrote to owners last November, blaming bad service on lack of support from the manufacturer.

He told his fractional owners, “We have done our best to shield you from Honda’s ineptitude, but our shield has worn through.”

The CEO added, “As a believer in the Honda brand, I am incredibly disappointed by the uptime of the HondaJet and the grossly inadequate support we (and by extension you, our member) have been subjected to by Honda Aircraft Company.”

However, he didn’t raise any safety concerns.

In fact, the former salesman for Honda Aircraft, who then chose the aircraft he was selling as Jet It’s platform, referred to the very light jet “as a fine piece of engineering.”

Blaming safety as the reason for Jet It was grounding its HondaJet fleet was rebuffed by two other fractional programs, Jet Token and Volato, which both said they disagreed with the move.

Honda responded with a statement, stating, “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.”

Gonzales also raised the ire of the HondaJet Operators & Pilots Association. In a Monday email to owners, he claimed HJOPA had also called for a safety stand down via a video.

However, HJOPA Executive Director Julie Hughes said she was blindsided, telling Private Jet Card Comparisons, “We have not communicated with Jet It on this issue and were surprised to see them inaccurately characterize our position. We do not want to ground the airplane. We believe the airplane is safe. We want to use data from the incidents as a basis for enhancing pilot training and decision-making. In no way do we think the HondaJet should be grounded.”

Whether Jet It can take flight again remains in serious doubt.

Jet It owners were flying for as little as $1,600 per hour, a price some say was unsustainable. Some contracts also prevented the operator from adding a mandatory fuel surcharge.

In fact, while owners were complaining about cancelations and lack of availability, and Jet It was complaining about the reliability and availability of its HondaJet fleet, charter brokers say they were chartering flights from Jet It for their clients at net rates of more than $5,000 per hour as the industry struggled last year with availability against record demand.

Jet It’s website currently has no mention that it is not flying.

For program owners, they now have the difficult path of figuring out what’s next with their shared airplanes parked on airport ramps across the country.

Chris Pratt, a business aviation veteran, posting on LinkedIn, wrote, “One of the complicating factors in these situations is whether the original engines are on the aircraft. Programs often swap engines from a pool or use rentals while the original are in for service. Tracking down the correct serial numbers for each aircraft engine and putting the original engines with the correct aircraft can tie up ownership disputes for quite some time. This was a major factor in the Avantair debacle, and that case dragged on for years. Don’t assume selling the jets will be easy.”

In fact, Jet It owns shares in some of the aircraft giving it a say in what’s next.

Aviation attorney David Hernandez of Vedder Priced recommends to owners, “Determine all available options based on the relevant circumstances, create a resolution plan, and immediately execute the plan. Act fast because available rights and remedies evolve rapidly in a crisis situation, and those who delay may be left with nothing.”

He also cautioned against “relying on the advice of brokers or consultants because their primary concern is not to protect your rights under the program agreements.”