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Aerospace & Defense

Mitsubishi jet turns to Europe while awaiting US takeoff

Orders reach 490 as Japanese plane maker aims to leave delays behind

© Illustration by Michael Tsang

TOKYO -- Mitsubishi Aircraft is winning orders for its SpaceJet plane outside its home market, including in Europe, as it fights to become Japan's first global commercial aircraft maker despite numerous setbacks.

The prospective orders, which came last week in the form of memorandums of understanding and commitment letters, bring the total number of orders for the SpaceJet to 490 from 400, said people familiar with the matter. The latest orders are for the SpaceJet M100, a 76-seat regional jet, plans for which were announced at the Paris Air Show in June.

The Nagoya-based company, a unit of Mitsubishi Heavy Industries, believes it can rake in another 400 orders in early 2020, the people added. The new orders are likely to be MOUs, but the strong indications of interest may encourage the parent company to formally launch the M100.

That aircraft is a smaller version of the company's M90, which is aimed at the Japan market and is still in the process of certification. The M100 targets North America, where pilots unions and big airlines have agreements limiting the size of planes that affiliated regional carriers can fly.

Mitsubishi Aircraft sees North America as potentially its biggest market, with demand for more than 2,000 planes expected over the next 20 years, or 40% of the global total. But Europe is its next priority, and the company is conducting a market study for the 100-seat M200, the people said.

The M100 highlights Mitsubishi Heavy's determination to become a global player in complete aircraft, rather than limiting itself to the Japanese market. In June the company agreed to take control of Canadian aircraft maker Bombardier's regional jet business.

A Mitsubishi SpaceJet aircraft undergoes flight testing in the U.S. state of Washington. (Jiji)

Mitsubishi's worldwide expansion drive began in earnest in 2016 but has been slowed by a number of challenges. The company's organizational structure and aircraft design had to be overhauled, leading to delays and prompting complaints from Japanese buyers of the SpaceJet, ANA and Japan Airlines.

Mitsubishi Aircraft's global marketing shows no sign of slackening. "In order for us to succeed as a company, we have to succeed where the market is, and the market right now is in the U.S.," said one company official. Success in the U.S. will "give us the credibility, the experience and the income to continue to grow our business and the Japanese aviation industry."

ANA declined to comment on the SpaceJet. JAL, which has placed orders for 32 planes to replace its Embraer E170 and E190 aircraft, says the Brazilian jets still have a useful service life and there is no rush to retire them.

Embraer will offer the main competition to the SpaceJet. Boeing's purchase of 80% of Embraer's commercial aircraft business this year is still another challenge for Mitsubishi.

To survive the competition, Mitsubishi will need to push ahead with its global expansion, according to David Pritchard, associate professor at the State University of New York's Empire State College. He argues that Mitsubishi on its own, even after buying Bombardier's operations, is no match for the Boeing-Embraer alliance.

"Currently, Mitsubishi ... doesn't have any global risk-sharing partners for the airframe. This, along with their small manufacturing footprint in Japan, doesn't allow them to expand their production capabilities," Pritchard said.

"For the Mitubishi SpaceJet program to be successful in the long term and compete with the [Boeing-Embraer alliance], Mitsubishi needs to find a joint venture partner that has financial, servicing and marketing resources to support their program," he said.

Prichard added that U.S. President Donald Trump could hit a new Japanese competitor with tariffs. But Mitsubishi believes it can fend off the threat of trade barriers by pointing out that more than 50% of the aircraft's components are from the U.S. It might also offer to set up a local assembly line to build the planes.

Mitsubishi has a more immediate problem: getting its first commercial jet, the M90, off the ground. Originally scheduled for delivery in 2013, the M90 has been beset with delays, prompting the parent company to bring in a large number of engineers from abroad in 2016 to overhaul the program. That resulted in about 900 design changes.

They included changes to the avionics bay, where dozens of computers are stored under the floor and control the brakes, cockpit displays and flight controls. The original design did not have enough separation between these computers and their backups, necessitating a complete redesign of the bay and wiring.

Mitsubishi Aircraft hopes to have the SpaceJet certified by the Japan Civil Aviation Bureau, and in commercial service by mid-2020, although there is talk of yet another delay. Once the aircraft is approved in Japan, certification in the U.S. should follow in short order. The company says it is pushing its engineers to complete their work as quickly as possible.

"For the first time ever," one official said, "we now see the light at the end of the tunnel."

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