Business

Mitsubishi Aircraft to scale down passenger jet development operation and cut half of workforce

Kyodo

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.

Chief Development Officer Alex Bellamy will step down at the end of this month, while Yasuhiko Kawaguchi, currently serving as the deputy head of the U.S. test site, will take the lead in aircraft development as executive chief engineer, starting on July 1, it said.

"This new, harsh business environment necessitated the development of a new operating plan for this fiscal year that includes resizing its organization so that Mitsubishi Aircraft may endure and emerge from this crisis," it said in a statement.

It will close its U.S. headquarters, a development center in Canada and sales offices in the United States and Europe, the company source said.

For this fiscal year, the company said it will focus on improving the design of the passenger jet and validating testing flight data as it seeks to obtain a safety certification from the Japanese transport ministry.

Mitsubishi Heavy has said it will reduce development costs in the aircraft business by more than half to ¥60 billion ($559 million) in the current fiscal year through next March.

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