Mitsubishi Heavy Industries Ltd. has delayed the debut of its regional jet for the sixth time, raising questions about whether years of investment in the SpaceJet were worth the effort.
Deliveries of the aircraft, which had been slated for the middle of this year, will now be pushed back until after the fiscal year ending March 2022, the manufacturer said Thursday, adding that it was taking a ¥496.4 billion ($4.5 billion) charge on the program.
The SpaceJet represents Mitsubishi’s effort to take on Embraer SA and capitalize on growing demand for short-haul flights. The plane, the first Japan-built airliner since the 1960s, accommodates about 90 passengers.
ANA Holdings Inc., the planned launch customer, has already indicated that it will seek compensation for the postponements, adding to the pressure on Mitsubishi Chief Executive Officer Seiji Izumisawa to start deliveries and recoup more than ¥600 billion in investments.
“The program has been plagued from delays from the moment they first launched it,” said Shukor Yusof, Singapore-based founder of Endau Analytics, a consultancy group that focuses on aviation. “It would be best if they just stopped the entire program and admit that they’ve failed.”
Mitsubishi Heavy said it no longer expects any profit from its business activities, and cut its overall forecast for net sales to ¥4.15 trillion from ¥4.3 trillion. The company is also replacing management of the aircraft division, with Takaoki Niwa taking over from Hisakazu Mizutani as president of Mitsubishi Aircraft.
Delivery of the plane had already been pushed back five times from its originally planned 2013 introduction. Mitsubishi bought Bombardier Inc.’s regional-jet business this year to bolster maintenance and marketing operations in support of SpaceJet.
But the initial model has run afoul of U.S. scope clauses, which govern the size of planes allowed to be used on certain routes. Trans States Holdings recently canceled an order for as many as 100 SpaceJets because of the clauses. Mitsubishi has said it would build a smaller, 76-passenger version, with deliveries scheduled to begin as early as 2023.
Mitsubishi is seeking certification of the plane at an uncertain time in the aviation world. The crisis over Boeing Co.’s 737 Max, which has been grounded since March following two fatal crashes, has raised questions about regulatory oversight and whether reform is needed in the way aircraft are certified.
“The longer the delay goes on, they are very much unlikely to be able to compete against the likes of Embraer and Airbus in regional jets,” Yusof said. “The longer this goes on, the greater the damage to the reputation of the manufacturer.”
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