Mitsubishi Heavy Industries Ltd. announced Friday it will enter the global market for regional jetliners, in the process becoming the first Japanese company to launch its own passenger jets.
According to MHI, the Mitsubishi Regional Jet will have a technological edge over its rivals because it will boast the world’s highest level of fuel efficiency, as well as the highest standards of cabin comfort.
Mitsubishi Heavy will launch two types — the 70- to 80-seat MRJ70 and the 86- to 96-seat MRJ90 — which will have a range of around 1,630 km to 3,630 km.
MHI will set up Mitsubishi Aircraft Corp. on April 1 to accelerate development of the jets. It will be capitalized at ¥3 billion and fully financed by MHI.
The capital is expected to eventually increase to ¥100 billion. MHI will invest in two-thirds of the ¥100 billion capital and for the remainder will seek finance from Toyota Motor Corp., Japan’s No. 1 automaker, group company Mitsubishi Corp., Mitsui & Co., Sumitomo Corp. and the Development Bank of Japan, it said.
“We have long remained as a business partner of U.S. and European (aircraft) makers. But we will take advantage of surging fuel prices and rising demand of environmental friendliness,” MHI President Kazuo Tsukuda told a news conference. “I hope it will become part of the businesses that will support our profits in the future.”
Nobuo Toda, a director and senior vice president of MHI, will become president of Mitsubishi Aircraft.
“MHI will use the world’s highest technology that we have nurtured in our aerospace and passenger jet business and create this next generation of jetliners,” he said.
“We will enter the market as a newcomer. But we need to create new value to be successful in the market,” he added.
President Tsukuda also said he expects the development costs to reach between ¥150 billion and ¥180 billion, and capital investment will be tens of billions of yen.
The news comes a day after All Nippon Airways Co., the country’s second-largest airline, said Thursday it plans to order up to 25 MRJs and will jointly develop the jet, becoming the leadoff buyer.
Thanks to its energy-saving turbofan engine, designed by U.S.-based Pratt & Whitney, and the use of lightweight carbon fiber composite materials, ANA said the MRJ will be about 40 percent more fuel efficient than the Boeing 737.
Japan’s largest airline, Japan Airlines Corp., is also considering buying the MRJ, but it has not yet reached agreement with MHI.
State-owned Vietnam Airlines is reportedly considering buying 20 of the regional jets.
Tsukuda said the new jet has received strong interest from American, Southeastern Asian and Middle Eastern airlines.
The market for jetliners with fewer than 100 seats is expected to be lucrative in the future amid surging oil prices and the aging of existing fleets.
According to MHI, more than 5,000 jetliners of the 60- to 99-seat type will be needed worldwide in the next 20 years.
But global competition in the aviation market is very fierce and little scope may be left for the new jet to gain a foothold, analysts said.