Transport Airlines

First Regional Jet in Japan for All Nippon Airways Gets Delayed Until 2017

Aug 22, 2013 6:02 am

Skift Take

As Boeing will tell you from its Dreamliner experience, manufacturing an aircraft is a highly complex undertaking. And Mitsubishi is finding that it needs to put greater resources than initially anticipated into the regional jet’s design.

— Dennis Schaal

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Mitsubishi Heavy Industries Ltd.’s aircraft unit, which is making Japan’s first regional passenger jet, pushed back the delivery of its first plane by more than a year after delays in certification.

Mitsubishi Aircraft Corp. will hand over its first plane in the second quarter of 2017, instead of an earlier plan to deliver by March 2016, the company said in a statement in Tokyo today. The aircraft’s initial test flight has been delayed to the second quarter of 2015 as against in the last three months of this year.

This is at least the second postponement after the company said in April 2012 that the first flight was delayed to confirm fabrication processes and complete technical studies. The Japanese company’s decision would follow Commercial Aircraft Corp. of China pushing back the maiden test flight of the country’s first large passenger plane to 2015 from an earlier plan for next year.

“The development of an aircraft is not easy and one will obviously face some difficulty to make and deliver the planes,” said Yukihiro Kumagai, an analyst at Jefferies Japan Ltd. in Tokyo. “I am also concerned about the impact on Mitsubishi from this delay.”

Design and certification have taken “greater resources” than anticipated, Mitsubishi Aircraft said in the statement.

Embraer, Bombardier

That “impacted component deliveries and aircraft fabrication,” the company said. Assembly of the first test airframes is under way in preparation for the ground and flight tests. ANA Holdings Inc. is the first customer for the plane.

“We regret the delay in the jet’s deliveries,” Ryosei Nomura, a Tokyo-based spokesman for ANA, said in an e-mailed statement. “We will examine the impact and make appropriate adjustments in order to avoid changes to our future plans.”

Mitsubishi Aircraft, based at Nagoya, Japan, is building 78- and 92-seater versions of the MRJ to compete with planes from Bombardier Inc. and Empresa Brasileira de Aeronautica SA as it forecasts global demand for 5,000 similar-sized aircraft over the 20 years to 2030.

Mitsubishi Aircraft, 10 percent owned by Toyota Motor Corp., has orders for 325 aircraft, according to the statement today. Of that, 165 are firm and the remainder in options. Mitsubishi won an order for 200 planes including options, worth $8.4 billion at list prices, last year from U.S. commuter carrier SkyWest Inc.

Russia, China

“As for our orders, we don’t expect the delay to have any major impacts,” Teruaki Kawai, president of Mitsubishi Aircraft, said at a press conference in Tokyo today. The delay in the development process is not because of engine development, he said. Pratt & Whitney, an United Technologies Corp. company, is the engine maker for the Japanese jet.

The Japanese planemaker and China’s Comac follow Russian- built Superjet, a venture between Sukhoi and Finmeccanica SpA, to develop planes with a capacity to seat about 90 people. Interjet, the Mexican low-cost airline, was the first carrier outside the former Soviet Union to operate the Superjet after getting delivery in June.

Comac delayed the flight of C919, a 168-seat aircraft, because of certain procedures that aren’t linked to technical matters, four company officials familiar with the plan said this month. In November, the Chinese planemaker said its smaller ARJ21 may not enter service for another two years.

Weak Yen

Mitsubishi in March said it is set to reap the benefits of a weakening yen after securing more than $4 billion of contracts for its plane when the currency was near a record high against the dollar. The Japanese yen has declined more than 19 percent in the past year.

The Japanese aircraft maker has won 325 orders, including options, for the plane, topping the company’s goal of as many as 250 planes before the Mitsubishi Regional Jet’s first flight, Chief Executive Officer Hideo Egawa said in an interview in Tokyo on March 8.

Bombardier wants to add a salesperson dedicated to Japan to win orders from All Nippon Airways Co. and Japan Airlines Co. for its CSeries jet, which seats 110 to 130 passengers, Andy Solem, vice president of sales for China and North Asia, said in February.

–Editors: Anand Krishnamoorthy, Subramaniam Sharma

To contact the reporters on this story: Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net; Anna Mukai in Tokyo at amukai1@bloomberg.net.

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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