TOKYO -- Mitsubishi Aircraft will begin discussions with U.S.-based Mesa Air for delivery of up to 100 SpaceJet passenger jets, potentially the first major deal for the model that the Japanese company hopes will help it break into the passenger jet market.
The two companies on Thursday in the U.S. said they are talking about a possible order for 50 of the 76-seat SpaceJet M100s, with an option for an additional 50 in a deal that could be worth as much as $5 billion.
SpaceJet M100 is a concept aircraft announced at the Paris Air Show in June that is designed to serve the U.S. regional jet market.
The announcement follows Mitsubishi's acquisition of Canadian rival Bombardier's CRJ regional jet business in June, a move that has eased competition in the market and given Mitsubishi a global maintenance and repair network -- a critical element if the Japanese startup wants to win the trust of airlines.
Mitsubishi estimates demand for more than 5,000 small regional jets over the next 20 years and hopes to control about half the market.
The regional jet market is a niche segment separate from the narrow- and widebody markets dominated by Boeing and Airbus.
SpaceJet's main rival is Brazil's Embraer E-Jet series with between 66 and 124 seats. Mitsubishi hopes to crack the market with a new model that the company says will be the most spacious in its class and 10% more fuel-efficient than its competitors.
The talks follow an earlier announcement of a memorandum of understanding for delivery of 15 M100 jets to a different, undisclosed U.S. regional jet operator.
If both deals are successful they would be Mitsubishi's first orders in three years, as its passenger jet program has been plagued by five delays and billions of dollars in cost overruns.
Development of the M100 still awaits the formal go-ahead from the maker's parent, Mitsubishi Heavy Industries. Approval may come as early as this year, with delivery of the M100 expected to begin in 2024.
Mitsubishi already has orders for 387 of the 76-seat M100s and 88-seat M90s.
The M100 program was unveiled in June to cater specifically to the U.S. market, where the pilots' union limits the size of regional jets to 76-seats.
The larger, $51-million M90 has been under development since 2007 and is expected to secure a U.S. type certificate and begin commercial operations next year.
Both the M100 and M90 are powered by Pratt & Whitney PW1200G turbofans.
Of the 387 planes on order, 25 are from Japan's ANA, 32 from Japan Airlines, 100 from Trans States Holdings, 200 from SkyWest Airlines, 20 from Aerolease Aviation, and 12 from Air Mandalay of Myanmar.
Mesa Airlines operates a fleet of 145 aircraft and serves routes to major cities on the east and west coasts of the U.S. as well as destinations in Canada and Mexico.
"With its large cabin, comfort, new technology and low operating costs, the Mitsubishi SpaceJet M100 can deliver this premium experience within the U.S. scope clause," says Mesa CEO Jonathan Ornstein.