Jet It decided to ground its fleet amidst a public squabble with HondaJet, calling out safety concerns after 10 runway incidents occurred involving HondaJet HA-420 aircraft in the last 15 months. After this news broke, it was reported that the company has had issues flying customers and furloughed workers recently. Just days after grounding its fleet and reports of furlough, Jet It sent a letter to employees that their jobs were terminated and the company was closing.
Volato CEO Matt Liotta told AIN that the company is preparing to offer the Jet It HondaJet owners short-term leases and onboard pilots that have been displaced. Liotta told AIN that Volato was in touch with nearly half of Jet It aircraft owners and former pilots who were applying for employment.
Jet It aircraft are grounded, waiting in maintenance shops for owners to pay for unpaid expenses like fuel, maintenance and storage. Flying reports that the tens to hundreds of thousands owed by Jet It will likely have to be paid by the fractional owners. Since the primary company hangar in Greensboro, North Carolina has not been paid for in months, Jet It has been locked out. Companies that have worked with Jet It in the past say it often struggles to pay on time, if at all.
Jet It managed 21 HondaJets and of those, at least 10 are currently in a maintenance shop. Three of the planes have maintenance liens for unpaid bills and one maintenance shop representative told Flying that the jet was in the shop and would not release it because Jet It had an unpaid bill for $24,000. The company did not mention bankruptcy in the letter to employees but sources told Flying Magazine that at least two aircraft sales executives for the company are each owed over $200,000. Jet It also reportedly owes Honda over $1.6 million in service contracts.
Despite the likelihood of a financial setback forcing Jet It to close, the company’s concern over HondaJets was not unfounded. HondaJet Owners & Pilots Association (HJOPA) also announced its plans to ensure safe operations, citing concern over the multiple runway incidents. Jet It has had a longer history with HondaJet, including a lawsuit filed by Honda over an alleged fleet purchase agreement violation when Jet It resold an aircraft. The lawsuit was filed on Dec. 27 and the two companies reached a confidential settlement in April.
Jet It CEO Glenn Gonzales sent out a letter to customers, slamming Honda’s reliability and support network. He claimed it had cost Jet It over $20 million in off-fleet expenses, claiming that, “for every nine days we fly a HondaJet, it requires six days of maintenance.”
Other companies had jumped to defend the company while Honda responded, stating it wanted to reconfirm its position on fleet reliability and its commitment to supporting its product.
Rocky history aside, there was reason for concern over HondaJets after multiple incidents were reported. Many involved the overshooting of runways, sometimes due to weather and other times blamed on pilot error. Executive director of the HJOPA Julie Hughes addressed the incidents on youtube. She said that a voluntary safety standdown would give members an opportunity to gain an understanding of the incidents and consider measures to create change or new/additional training.
It has been over one year since the last known HondaJet runway incident and there have been no orders or airworthiness directives for the jet. A representative from Honda Aircraft told GlobalAir.com the decision was made independently by Jet It and operations for the rest of the HondaJet fleet would continue normally. Volato does not seem deterred by the grounding, continuing with a strong relationship with Honda. The Atlanta-based company secured delivery of 23 HondaJets earlier in May, before the public Jet It grounding. This brings its fleet to 25, adding to the two previously-ordered jets. Volato currently has a fleet of 17 HondaJets.
Liotta is offering Jet It aircraft owners and pilots a possible way out, but this is not without its difficulties. Honda is also working with the fractional owners after Jet It’s closure. Liotta told AIN the real problem was not its fleet, but that Jet It charged owners an hourly occupied rate that was substantially below the aircraft’s direct operating cost. This was less than half of what Volato charges even before fuel is factored in.
Flying explained that the program was $1,600 per hour for Jet It owners and Volato charges $3,450 per hour, plus fuel pass-through. Jet It added a fuel surcharge program due to the Ukraine conflict, costing $250 per hour. Jet It fractional owners also only paid for the time they spent in the aircraft, not for other fees like repositioning the jet. Added together, this came closer o $2,700 per hour, making it a steal for fractional owners.
The price may have gotten the attention of many fractional owners, but the problems simply grew from there. Many jets were unavailable, often in the shop awaiting maintenance. Jet It fractional owners were told earlier this year that nearly 75 percent of the fleet was out of commission for maintenance reasons. While some were in the shop for routine maintenance, some were held due to Jet It not paying.
With the changes in the market during and after the pandemic, the industry is seeing changes. Operators are struggling with costs and the supply chain, raising prices for customers and businesses. Some companies have struggled with the increased demand paired with underlying struggles. The real reason for Jet It closing has not been established, but perhaps the customers and pilots can find new hope with Volato.