Jet It, a fractional aircraft and charter operator, is done.
At least that is the impression Jet It founder and CEO Glenn Gonzales gave fractional aircraft owners on a series of virtual calls on Wednesday, five days after he ordered a ground stop on the fleet of HondaJets the company manages.
Gonzales told HondaJet owners in the Jet It program their aircraft “will not be flying under Jet It” any longer.
(Disclosure: I am a Jet It fractional owner and attended the fractional owner calls.)
Gonzales suggested fractional owners should consider an array of options that include transferring the aircraft to another operator, selling the aircraft, or contracting directly with former Jet It pilots on furlough.
Fractional aircraft owners typically own a percentage of the aircraft, rather than the entire airplane. Jet It offered a range of ownership options, with the smallest being one-tenth ownership.
In a fractional relationship, a group of owners is pooled together to purchase an aircraft. The aircraft is then contracted out to an operator that flies the aircraft, oversees pilots, maintenance, flight operations, scheduling, and all of the day-to-day tasks of operating it. Owners typically pay a monthly maintenance contract, in addition to a per-hour operating fee when they fly on the aircraft.
Fractional ownership programs are attractive for consumers because the pool they belong to makes it less expensive to gain ownership of an aircraft, rather than buying it outright. Operating costs are also shared between the group of owners.
Gonzales Blames HondaJet
As a Jet It fractional owner myself, I attended one of the calls with the other owners of our aircraft. It was the first time I had met any of the other owners, and we were processing the news.
During our call with Gonzales, he put the blame for the failure of Jet It entirely on the Honda Aircraft Company, claiming that HondaJet aircraft suffered from a series of runway overruns. He cited a total of 20 incidents since the HondaJet was first introduced in December 2015. He compared that to the Embraer Phenom 100, which has seen 21 runway incidents since its first delivery in 2009.
Gonzales said the catalyst for grounding the HondaJet was an incident in Summerville, South Carolina. A Honda HA-420—not owned by Jet It—skidded off the runway and ended up in the grass.
“This one was different in the sense that it caught fire,” Gonzales said.
Gonzales said Jet It has requested due diligence information from HondaJet on the safety of the aircraft, documentation on the events surrounding the runway incidents, and why this has happened with the Honda aircraft.
Gonzales did not give a timeline of when Jet It expected to resume operations but made it very clear to owners that the company program they had participated in was terminating, and the owners would need to figure out what to do with their aircraft.
Skepticism of CEO Claims
One owner on the call said the story “didn’t feel right to him,” challenging Gonzales with a question of why Jet It is the only company to ground HondaJets and that neither any transportation authority nor Honda had required or even suggested it. The owner also said, “This feels like a negotiating tactic with Honda or your (fractional) owners.”
Another owner suggested it “wasn’t an airplane issue but rather a company issue.”
That owner pointed out that Jet It had also grounded its Phenom 100s, suggesting they should be flying if the company made the decision about the HondaJet entirely based on safety factors.
The same owner also questioned Gonzales about the financial condition of Jet It, saying “it sounds like you are bankrupt to me.”
The sentiment resonated with many of the other owners on our call.
In response, Gonzales claimed he did not intend to file for bankruptcy but referenced the financial challenges of running a company with its entire fleet of aircraft grounded. He also asked for patience but didn’t suggest why it was merited.
With the entire Jet It fleet currently grounded, nearly all of the company’s staff have been terminated, including the pilots. This includes pilots flying both the HondaJets and Phenoms.
Jet It boasted a fleet of 20 HondaJets and a couple of Phenom 300s and Gulfstream G150s. Prior to this action, Jet It was the largest operator of HondaJets in the U.S.
Fractional Owners Consider Options
In a situation where the operator—in this case Jet It—is shutting down its fractional contracts, the owners must come together to decide what they want to do with the aircraft. This can be challenging because it requires the owners to reach a consensus on what they want to do. As is the case with many of the Jet It owners, often they previously have had no relationships or contacts with the other owners and are frequently unaware who the other partial owners are.
Now, they must come together, develop a plan, and decide on a course of action. Because Jet It has laid off nearly all of its workforce, the fractional owners have to do the work themselves, with little help from the company. It is a mess.
Do you have a news tip to share? Send me a message @freightalley on Twitter. Your name will not be used without your permission.