Mitsubishi is planning on entering the regional jet market—at the same time that Airbus and Boeing are expanding their footprint in it.
The Mitsubishi Regional Jet (MRJ) is a passenger plane with a range of about 2,000 miles—an aircraft with fewer seats and a smaller fuselage, suited for domestic travel in Japan and Europe. It comes in 88-seat and 76-seat variants.
The MRJ has been in development for most of a decade, at a cost of $2 billion. Mitsubishi originally planned test flights in 2012 but the plane has been hampered by delays. Now it’s taking its final steps towards entry into the market. Once the plane is certified, which could happen this year, ANA airline will start flying it on regional routes in Japan as early as 2020.
Mitsubishi currently has 407 orders for the MRJ. But analysts conclude that isn’t enough to make it profitable yet.
“Longer term, there should be an opportunity, but right now they have to deliver the very first plane,” said Sho Fukuhara, an analyst at Jefferies Japan Ltd. “Potential buyers are looking at how they proceed with their schedule.”
The company also has to resolve a lawsuit by rival Bombardier, which claims Mitsubishi stole trade secrets. Mitsubishi has counter-sued, accusing Bombardier of breaking antitrust laws.
Mitsubishi has been a parts supplier to Boeing for a long time—but now it’s stepping out on its own. The manufacturer has a unique opportunity now that potential rivals Embraer and Bombardier have sold off their regional jet lines to Boeing and Airbus respectively.
“Bombardier’s moves do indeed create opportunities for the MRJ,’’ said Richard Aboulafia, aerospace analyst at Teal Group. “It’s the biggest single factor in the MRJ’s favor.’’
The MRJ would be ideal for the booming Asian market. “The aviation market in Asia is expected to grow further in the coming years and there will be demand for these aircraft,” said Lee Dong-heon, an analyst at Daishin Securities Co.
But Mitsubishi also sees potential for growth in the U.S. market, where major airlines outsource short flights to smaller operations. Globally, the regional jet market is anticipated to be worth $135 billion in sales over the next two decades, according to the Japan Aircraft Development Corp.
2019 looks to be a make-or-break year for the MRJ as it prepares to take on Airbus and Boeing. “This coming year is extremely important for us,” said Mitsubishi Aircraft Corp. President Hisakazu Mizutani.
Read more about the regional jet market at Airbus Breaks Ground on New A220 Factory—on Boeing’s Turf.