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Mitsubishi jet makes airshow debut ahead of dogfight with giants

Boeing and Airbus promote newly acquired smaller aircraft at Farnborough

Clockwise from top, Mitsubishi's MRJ regional jet made an appearance at the Farnborough Airshow, as did Airbus' A220-300 and Embraer's E190-E2. (Photos by Masamichi Hoshi)

FARNBOROUGH, U.K. -- When the Mitsubishi Regional Jet first began development, its two biggest rivals were relatively minor players in the aircraft industry. But 10 years and multiple delays later, Japan's first modern passenger plane finds itself competing in a marketplace being taken over by the twin behemoths Boeing and Airbus.

The MRJ made its maiden appearance at the Farnborough International Airshow, the biennial event that kicked off Monday at Farnborough Airport near London. Emblazoned on the body and tail is the blue-and-white All Nippon Airways logo, symbolizing the distinction Japan's ANA Holdings holds as the jetliner's first customer.

The jet's first appearance at an airshow is meant to demonstrate to airlines that development is going smoothly, and that the first plane will be delivered on time in two years. But five postponements have taken a heavy financial toll on Mitsubishi Aircraft, the MRJ's manufacturer.

Mitsubishi Aircraft's negative net worth more than doubled to 110 billion yen ($979 million) as of the close of fiscal 2017 on March 31. The MRJ has not received any new orders for over a year. On top of that, Eastern Airlines of the U.S. cancelled an order for 40 aircraft in January, lopping off roughly 10% of the jet's entire order book.  

Eastern's cancellation has been attributed to last year's takeover of the airline by American peer Swift Air, and not to the MRJ's delay. In any case, the loss of a customer has frustrated Mitsubishi Aircraft's path to profitability.

Mitsubishi Aircraft, a Mitsubishi Heavy Industries group company, officially announced the latest delay to MRJ deliveries in January 2017, this time to address problems with the system's wiring. Orders were slated to be fulfilled by around the middle of this year, but the target date was pushed back to 2020.

Since the latest delay, the business landscape has shifted drastically. Another plane that took flight at Farnborough is the aircraft once known as Bombardier's C Series jet but now named the Airbus A200. France's Airbus took a majority stake in the Canadian company's C Series business, and rebranded the portfolio.

Airbus had lacked passenger jets that seat around 100 to 150, while Bombardier had been a poor salesman of the C Series, with orders languishing at roughly 400 aircraft. Because Airbus has a vast sales network extending to basically every international airline, as well as ample resources in finances and talent, putting the C Series under the aegis of the European manufacturer gives the jets a potent new lease on life.

The  A220 is not considered a direct competitor to the MRJ, which seats fewer than 100 passengers. Mitsubishi Aircraft's main worry is Brazil's Embraer, whose regional jets rival the MRJ on all fronts.

That threat is even greater now. On July 5, Boeing of the U.S. said that it will take over Embraer's 70- to 130-seat commercial aircraft business. However, Boeing is not just MRJ's new rival, it is also a partner. Mitsubishi Aircraft has an existing contract with Boeing under which the American company provides 24-hour customer support to MRJ's client airlines.

Following the MRJ’s debut, Shunichi Miyanaga, president of Mitsubishi Heavy Industries, said at a news conference, “We have a strong relationship with Boeing, built over several decades through the airplane parts business.” 

Miyanaga said the Japanese company has confirmed that the cooperation between the two manufacturers will continue after Boeing announced the purchase of Embraer. He stressed that the two parties “can build friendly relations in the mid-to-long term.”

The rise of budget airlines and burgeoning demand from Asia are fueling the rapid expansion of the passenger aircraft market. In 2037, a projected 39,867 aircraft will be in operation, up 80% from 2017, according to data from Japan Aircraft Development Corp. The biggest growth category will be narrow-body, single-aisle jets with limited seating.

Low-cost carriers, which usually employ smaller aircraft, are expected to gain more momentum, and they are already traveling to more distant destinations and transporting more passengers, encroaching on the domain enjoyed by bigger airlines. Both Boeing and Airbus are looking to get an inside track on this trend by offering lineups of airplanes that encompass all sizes.

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