Business Aviation
Honeywell and Flexjet Settle Dispute and Extend Engine Contract to 2035
Honeywell and Flexjet resolve litigation over engine maintenance delays and renew their HTF7000-series engine contract through 2035 with a $470M cash settlement.
This article is based on an official press release from Honeywell and Flexjet.
On January 21, 2026, Honeywell and Flexjet announced a comprehensive settlement to resolve all pending litigation regarding engine maintenance delays. The agreement not only ends a high-stakes legal battle that began in 2023 but also secures a long-term Partnerships between the two aviation giants. As part of the deal, the companies have renewed their Master Maintenance Agreement (MSA) for Honeywell HTF7000-series engines through 2035.
According to the joint press release, the settlement resolves all claims between the parties, including related litigation involving third-party maintenance providers StandardAero and Duncan Aviation. The deal allows Flexjet to secure guaranteed support for its fleet while enabling Honeywell to clear significant legal liabilities ahead of its planned corporate restructuring.
The settlement involves substantial financial considerations and service commitments. While the official press release emphasizes the renewed partnership, regulatory filings and company statements provide a clearer picture of the financial magnitude of the agreement.
Flexjet has characterized the total value of the settlement as exceeding $1 billion. This figure includes both “cash considerations and service credits,” which will likely be applied to future engine maintenance events. In contrast, Honeywell’s disclosures offer specific details regarding the immediate financial impact.
According to Honeywell’s SEC Form 8-K filings referenced in market reports, the settlement involves a one-time cash payment of approximately $470 million. Additionally, Honeywell expects to record a charge in the fourth quarter of 2025 that will reduce sales by approximately $310 million and operating income by roughly $370 million.
“We are pleased to have reached a resolution that supports our long-term growth and ensures the highest level of service for our customers.”
, Joint Statement from Honeywell and Flexjet
The renewed Master Maintenance Agreement covers the HTF7000-series engines, which power a significant portion of Flexjet’s mid- and super-midsize fleet. This extension guarantees maintenance support through 2035, providing Flexjet with operational certainty for the next decade. The conflict between the two companies originated from a 2019 maintenance agreement. In May 2023, Flexjet filed a lawsuit alleging that Honeywell had failed to meet contractual turnaround times for engine repairs and did not provide sufficient rental engines during maintenance events.
Flexjet’s legal filings claimed that these service failures led to significant aircraft groundings. At the peak of the supply chain crisis, reports indicated that up to 40 aircraft were parked due to a lack of available engines. Flexjet argued that Honeywell had prioritized new engine deliveries to original equipment manufacturers (OEMs) over supporting existing customers, a claim Honeywell contested.
The dispute escalated in 2025 when a New York court upheld the enforceability of a liquidated damages clause. This ruling exposed Honeywell to potentially massive liability, which analysts believe accelerated the push for a settlement before a jury trial scheduled for 2026 could commence.
The settlement serves distinct strategic goals for both organizations. For Flexjet, the deal secures the stability of its core fleet, which includes Bombardier Challenger 300/350 and Embraer Praetor 500/600 aircraft. The inclusion of service credits effectively subsidizes future maintenance costs, offsetting the financial impact of previous disruptions.
For Honeywell, the agreement removes a major legal distraction. The company is currently preparing for a spin-off of its Advanced Materials business. By resolving this litigation, Honeywell presents a “cleaner” investment profile to shareholders and avoids the unpredictability of a prolonged court battle.
We observe that this settlement is emblematic of the broader post-pandemic aerospace supply chain crisis. The dispute between Honeywell and Flexjet was not an isolated incident but a high-profile symptom of industry-wide shortages in skilled labor and critical parts, such as castings and forgings.
The structure of the settlement, heavy on “service credits”, is a common mechanism in aviation disputes. It allows the vendor to retain the customer’s business long-term while inflating the “headline value” of the compensation package without requiring an equivalent immediate cash outflow. For the industry at large, this agreement may set a precedent for how operators negotiate compensation for service failures, signaling that major OEMs are willing to pay a premium to avoid reputational damage and legal uncertainty during restructuring phases.
What engines are covered by the renewed contract? How much is the settlement worth? Does this end all litigation between the parties?
Honeywell and Flexjet Settle Billion-Dollar Dispute, Extend Engine Contract to 2035
Key Deal Terms and Financial Impact
Valuation and Cash Payments
Contract Extension
Background of the Dispute
Operational Disruptions
Strategic Implications
AirPro News Analysis
Frequently Asked Questions
The agreement covers Honeywell HTF7000-series engines, which power Flexjet’s Bombardier Challenger 300/350 and Embraer Praetor 500/600 fleets.
Flexjet values the total package at over $1 billion, including cash and service credits. Honeywell’s regulatory filings indicate a cash payment of approximately $470 million.
Yes. The settlement resolves all pending claims between Honeywell and Flexjet, as well as related litigation involving third-party maintenance providers StandardAero and Duncan Aviation.
Sources
Photo Credit: Flexjet