The Honda team principal, however, also admitted to the Dutch magazine Formule 1 Race Report that he "hates" the fact that the Japanese manufacturer's satellite team is embarrassingly beating the hugely-funded works squad.
Leafield based Super Aguri uses a year-old Honda chassis, and an identical engine and gearbox to its parent team.
Its drivers, Takuma Sato and Anthony Davidson, are also less experienced and generally not rated as highly as Honda's pairing of Jenson Button and Rubens Barrichello.
The team led by former F1 racer Aguri Suzuki, however, has been regularly more competitive than Honda so far in 2007 and is the only team of the duo to have scored a point -- with a workforce of 114, compared with Honda's nearly 500.
"I am happy for them -- we are all a part of the Honda family," Fry said, adding that it is "marvellous" to see Sato and Davidson - respectfully former race and test drivers for the Honda camp - enjoying some worthy attention.
But 50-year-old Fry also confessed that it is "absolutely not nice" to see his works cars behind what is effectively a customer team.
"I hate that," he said, "but I have to congratulate them for their achievements. They have done a very good job."
Fry, though, warned Super Aguri to not expect to still be ahead of Honda as the current season winds on.
"Development in formula one is very competitive," the Briton insisted, "and you have to have the resources to keep it up.
"I think it will be very difficult for them to keep going at this level." (GMM)