Mitsubishi Aircraft Corp. said Monday it will downsize and reshuffle the team developing Japan's first passenger jet in the face of plunging air travel demand due to the COVID-19 pandemic, in a move that could further delay the aircraft's launch.

As part of its restructuring, the aircraft-making subsidiary of Mitsubishi Heavy Industries Ltd. will cut more than half of its 2,000 workforce and close all of its overseas bases except for the company's flight test site in the U.S. state of Washington, a company source said.

The company is developing a small aircraft known as the Mitsubishi SpaceJet, previously known as the Mitsubishi Regional Jet. Its initial delivery to All Nippon Airways Co., originally planned for 2013, has been postponed six times to 2021 or later due to problems with parts.