SINGAPORE/FARNBOROUGH, ENGLAND – Mitsubishi Aircraft Corp., trying to keep its new regional jet on track after a series of delays, was forced to cancel a demo flight for the world’s aerospace industry Tuesday after the jet was hit by a truck.
The collision, which follows the jet’s debut at the show Monday, will not interrupt marketing efforts. But it will do nothing to help the Mitsubishi Regional Jet pull in orders at a time when giants Airbus SE and Boeing Co. are extending their grip to the smaller end of the market.
The 90-seat MRJ, Japan’s great hope for reviving a dormant commercial aviation industry, was launched a decade ago. Five delays later, it is now expected to enter service with carrier ANA Holdings Inc. in 2020, compared with the initial target of 2013.
As a result, it missed a potentially lucrative window of opportunity to be the first to market the latest generation of fuel-efficient regional jets.
It is up against Embraer SA, whose commercial aircraft arm may be controlled by Boeing if a provisional deal between the manufacturers is completed. Meanwhile, Airbus has pushed into the smaller end of the jet market with a deal to take control of the Bombardier Inc. CSeries, now branded as the A220.
“These developments are disastrous for the MRJ,” said Richard Aboulafia, vice president of analysis at Teal Group. “They are no longer competing with small companies from Canada and Brazil; they are now competing with global aerospace behemoths, with enormous pricing power and industrial scale.”
Mitsubishi Aircraft is looking to gain orders despite the increased competitive threat, and executives at a news conference Monday in Farnborough — as an A220 flew overhead — said they felt they had a good chance in the regional market.
“This is the newest plane design in several decades,” said Shunichi Miyanaga, president and CEO of parent Mitsubishi Heavy Industries. “Engine-wise and aerodynamically it is the newest type of regional jet and is highly competitive.”
It will not compete with larger variants of the newest Embraer jets or the A220. Miyanaga said it wanted to focus on the 100-seat-and-under segment of the market.
However, analysts say the more immediate challenge is hanging onto its existing order book, given Mitsubishi Aircraft has so far lost its bet on U.S. pilot unions relaxing strict rules regarding jet size flown by regional carriers.
Of the 213 firm orders, 150 are split between two U.S. regional carriers — SkyWest Inc. and Trans States Holdings.
The MRJ90 is too large for them to fly without relaxing pilot union rules, and the prospect of any changes has dimmed due to a pilot shortage which has given unions more bargaining power.
As a result, Mitsubishi Aircraft is now trying to bring the smaller MRJ70, which can be flown by U.S. regional pilots, into service as quickly as possible, with a target date of late 2021.
FlightGlobal’s 2018 Flight Fleet Forecast released last week estimated the regional jet market at $120 billion over the next 20 years, with 40 percent of the value coming from 70-76 seaters serving the North American market.
However, the MRJ has yet to convince its key U.S. customers to switch to its smaller jet, which has its own challenges.
Rather than the 76 of the rival Bombardier CRJ900 and Embraer E175, the MRJ70 has 69 seats when configured with business and economy class arrangements, as is typical in the U.S., meaning its fuel efficiency is less of an advantage than it might seem.
“Downsized variants of jetliner families have inferior economics — fewer seats, but the same engines, systems and most of the structures too,” Teal Group’s Aboulafia said.
Embraer on Monday signed a firm order with United Airlines for twenty-five 70-seat E175 jets, shortly after JetBlue Airways Corp. opted to replace its fleet of Embraer jets with the A220.
SkyWest Inc. and Trans States Holdings Inc. did not immediately respond to requests for comment on whether they plan to switch to the MRJ70.
For the Japanese consortium behind the MRJ, led by Mitsubishi Heavy with a 64 percent stake, the project has so far been a financial disappointment due to the delays and technical challenges.
The Nikkei last week reported Mitsubishi Aircraft was looking to increase its capital through a combination of a debt-to-equity swap and raising fresh equity.
Conglomerate Japan’s ultimate goal for the program, however, goes beyond profit. It is about serving as a foundation for the country’s revival as a passenger jet manufacturer rather than just a major supplier to companies like Boeing.
“We are working without pause to deliver the first aircraft to ANA in 2020. It is the beginning of a countdown, not only to the first delivery but to a new era for the industry,” Miyanaga said.
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