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Honda Sets Growth Plan as Plane Venture Nears Final Test

May 22 (Bloomberg) -- Honda Motor Co. will boost staffing at its aircraft unit by as much as 50 percent as it expands production of the new HondaJet to about 90 a year to compete with business-jet makers Cessna and Embraer SA.

Honda Aircraft Co. will add 300 to 400 staff in the coming years to the 800 already employed in development and production of the $4.5 million plane that can seat as many as seven, Michimasa Fujino, chief Executive officer of the Greensboro, North Carolina-based unit, said in an interview in Geneva. The plane should gain regulatory approval late next year, he said.

First HondaJet deliveries have slipped a year on delays with the HF120 turbofan engine built by a joint venture of General Electric Co. and Honda and the engine is now due to gain regulatory approval by year’s end. Several HondaJets are flying, although trials to win the U.S. Federal Aviation Administration’s approval will only commence once the motor has been endorsed.

“We are using this time to optimize the production processes so the initial ramp-up will be much better,” Fujino said at the Ebace business-aviation expo. “It is similar to an automobile line.”

Building of the first customer airplane with its over-wing-mounted engines to reduce noise has already started and a handful should be completed next year, Fujino said. The first operators will be in the U.S., and Europe could follow soon after, he said.

Larger Cabin

Honda is competing for sales with established manufacturers such as Textron Inc.’s Cessna, the largest builder of business jets, and Brazil’s Embraer. Fujino said the HondaJet’s engine arrangement allows for a larger cabin than rivals and greater fuel efficiency.

Honda Aircraft, which has booked more than 100 plane orders, remains optimistic about the market evolution. “The annual growth rate in business jet demand is steadily increasing,” Fujino said. “If you look at the next 10 years, we have a good trend.”

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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