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Mitsubishi to turn MRJ into cheaper, smaller 'Space Jet'

Project centers on redesigned 70-seat model, with US production on the table

The smaller version of the rebranded Space Jet will help ensure access to the U.S., the world's largest aviation market. (Photo courtesy of Mitsubishi Aircraft)

TOKYO -- Mitsubishi Heavy Industries is revamping its long-delayed Mitsubishi Regional Jet project to concentrate on a smaller model for the U.S. market -- and dropping its own name from the aircraft to reflect a more global vision for a previously Japan-centric business.

Development subsidiary Mitsubishi Aircraft plans to offer an outline of the reworked project, the Space Jet, in June. This will entail a drastic redesign to create the smaller 70-seat-class model, with work to get underway in earnest as early as this year.

Mitsubishi Aircraft also plans to switch to American suppliers for certain parts to cut costs, aiming to make price a selling point along with fuel efficiency, and is considering production in the U.S. as well. Along with the renaming, this marks a significant change in direction for what had been envisioned as Japan's first homegrown commercial jet.

In the U.S., agreements between pilots and carriers include "scope clauses" that cap the number of seats on planes serving regional routes at 76. Mitsubishi Heavy started work on the mainstay 90-seat-class model in 2008 amid widespread expectation that these limits would be relaxed.

But with the industry suffering from a pilot shortage, that looks unlikely to happen anytime soon. With prospects looking grim for American sales of the larger plane, the company opted to focus on the smaller version to ensure access to the world's largest market.

Work will continue on the larger version. Mitsubishi Aircraft is in the final stages of securing a type certificate -- a requirement for commercial service -- for this model from Japan's transport ministry and plans to begin delivery as early as 2020. But this part of the business will likely fall out of focus with the transition to the new, lower-capacity aircraft.

However, the redesign means that the smaller plane is expected to get a type certificate no sooner than 2022. Customers that switch orders from the 90- to the 70-seat-class model will find their deliveries delayed even further.

The smaller jet will compete with offerings from Brazil's Embraer and Bombardier of Canada. Embraer has received about 960 orders for 70-seat-class planes in its E-Jet series. Still unclear is how much market share Mitsubishi Aircraft will be able to take from these more established players.

The Japanese company had received as many as 447 orders for the larger MRJ. But cancellations have since lowered the figure to 407, and Mitsubishi Aircraft has essentially stopped accepting further orders.

The MRJ project was launched as an effort to build Japan's first indigenous passenger aircraft since the YS-11 turboprop plane, which entered service back in 1965. Mitsubishi Heavy bet its fortunes on the MRJ, pouring 600 billion yen ($5.48 billion) into development.

Mitsubishi Aircraft initially planned to begin delivery of the 90-seat-class model in December 2013, but design changes and delays in safety certification led to five postponements spanning seven years. The company has shaken up the project's inward-focused structure, giving non-Japanese personnel central roles in development and marketing.

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