Mitsubishi Heavy Industry is more than $5 billion into the development of its new regional jet product line. The company is also finally approaching the finish line on certification of its first plane, expected in 2020. Under many circumstances this would be a celebratory moment.
But for Mitsubishi that excitement is tempered by the fact that its 90-seat flagship model remains too large to fly in the US market as a regional aircraft. It is too heavy and carries too many seats. The company bet on scope clause change a decade ago and lost. The MRJ’s potential in the United States, the world’s largest aviation market and the largest regional jet market, is nil. Mitsubishi must plot a new course.
The company is doubling down on development of a 70-seat model that will meet the scope clause requirements. Welcome to the Space Jet.
The new plane is not just a smaller version of the existing MRJ. The company is shifting its design ethos to consider foreign-made components, including US-based suppliers. The executive team also features more foreigners. The new Space Jet may even eventually be assembled in the United States to attract sales from US carriers. It is no longer expected to be a truly “home-grown” aircraft entirely from Japan.
Using parts sourced from US suppliers should help the company reduce its costs as it pushes towards certification of the new, smaller type. It should also help ease that certification burden as the suppliers are known to regulators, as is the reliability of their products. The shift also pushes the certification timeline for the 70-seat Space Jet further out. That is not expected before 2022 given this redesign.
Delivery timing and updated fuel efficiency specifications of the redesigned Space Jet model remain unclear, as does the competitive landscape. In the 70-seat segment Bombardier and Embraer are the two main players, the former with its CRJs and the latter with its E-Jets. But Bombardier’s success in the commercial aviation space waned significantly in recent years. The company sold off its CSeries line to Airbus and its Q400 turboprops to Viking. The CRJ forms the basis of a relatively successful business aviation market as well – that was its initial purpose – but commercial airlines mostly have avoided the type in recent years. The company is clear that without a significant order boost – one that does not appear imminent – the commercial aircraft segment may be shuttered.
Read More: Did the MRJ Finally Die?
Embraer’s outlook is quite the opposite. The company continues to progress in its tie-up with Boeing to market the E-Jets line and the order book remains healthy. The refreshed E2 version of the E175 is in assembly now and quickly moving towards certification from Brazilian authorities. Embraer’s emerging monopoly is a position that upstarts will want to challenge, of course, but it is unclear Mitsubishi can attract sufficient orders even with (or because of) the shift in design and assembly plans.
A tired design
Mitsubishi will find it difficult to stand out as a compelling competitor unless it can demonstrate dramatically different performance or passenger comfort from others in the regional jet space. The company does not have a strong aviation history to rely on nor a particularly compelling sales pitch.
During air shows over the past several years the company has made a cabin mock-up available to explore. The seating layout is typical. The overhead bins are average at best. The windows are not especially large, a factor that may not drive airline sales, but it certainly contributes to the overall feeling of openness and light in the cabin and those do matter for the passenger experience.
More technical challenges around aircraft weight (fewer carbon fiber components than initially planned), runway requirements and fuel efficiency further hamper the type’s potential.
Mitsubishi still holds orders for more than 400 of the 90-seat MRJ, though only about 200 of those are firm. Moreover, that number has been stalled for years. And more than 70% of those orders are held by SkyWest and TransStates, US regional carriers that will never operate the type because the scope clause relief never happened.
Securing the certification could open the door for future orders, but the demand for a new 90-seat aircraft from an unproven vendor remains unclear. At best it would appear that the Super Jet would allow for conversion of those US-based orders into something Mitsubishi could deliver and that the airlines would be able to operate under their contracts. But the further delays to realize those deliveries are unlikely to help Mitsubishi’s position much.