It was in the lead-up to the Paris air show in June 2019 that news emerged of Mitsubishi Aircraft reworking its regional aircraft programme, then known as the MRJ.
Among the changes to be made: a redesign of the smaller MRJ70 variant into a 76-seater product known then as “The Concept.”
Then, days before the show began, Mitsubishi went a step further, rebranding the MRJ as the SpaceJet. The larger MRJ90 variant was to be known as the M90.
Source: Mitsubishi Aircraft
Meanwhile, “The Concept” became the M100, a 76-seater variant that Mitsubishi said it would get to work on.
The M100 model was to be purpose-built to target the USA regional market’s operational constraints. So-called scope clauses between major airlines and their pilot unions largely restrict feeder carriers from operating aircraft with more than 76 seats or an MTOW exceeding 39,000kg.
Now, nearly a year after the fanfare, Mitsubishi’s SpaceJet regional aircraft programme faces an existential crisis of sorts.
There have been multiple rounds of developmental delays, and even a cancellation of orders from US regional operator Trans States Holdings.
In its full-year results release on 11 May, parent company Mitsubishi Heavy Industries (MHI) announced budget cuts for its flagship regional jet programme, adding that it was setting an ”appropriate level of budget” for the SpaceJet programme.
For the year ending 31 March 2021, the budget allocated for the SpaceJet regional aircraft programme will be halved to Y60 billion ($558 million), taking into account the impairment losses from acquiring Bombardier’s CRJ programme.
Furthermore, MHI stated it was “[reconsidering] the process of the…M100 feasibility study”, but stressed it was committed to bring the baseline M90 variant to market. It gave no further details about its plans for the M100 variant.
The latest turn of events to hit the SpaceJet programme also comes amid a series of developments in the regional jet market. This started with Bombardier’s decision to exit the market and the sale of its CSeries programme to Airbus. Mitsubishi subsequently acquired Bombardier’s CRJ programme with the deal set to close by 1 June.
More recently, a proposed partnership between Boeing and Brazilian regional jet giant Embraer fell through after the US airframer – which has its own list of issues – bailed out.
The collapse of the Boeing-Embraer joint venture should have spelled good news for Mitsubishi, says Teal Group aerospace analyst Richard Aboulafia, as it gives Mitsubishi better leverage to compete against the Brazilian airframer.
Calling the latest Mitsubishi development “truly bizarre”, Aboulafia has this to say: “What is particularly strange is that this is happening right after the collapse of the Embraer/Boeing [joint venture], which would seem to be a very positive development for the SpaceJet.”
Rob Morris, head of global consultancy at Ascend by Cirium, adds that the current coronavirus pandemic, which has led to a collapse in demand in the aviation market, is helpful for Mitsubishi, in that it allows a review of its development programme.
“It is clear that Bombardier are exiting the regional jet market [with Mitsubishi’s help] and that leaves Embraer with a virtual monopoly,” says Morris. ”It may be a monopoly in an uncertain market, but Mitsubishi are well down the development road and thus it makes sense to continue development and use the time that the demand hiatus offers to review the development programme.”
Source: FlightGlobal
Mitsubishi’s SpaceJet M90 on display at the Paris air show
The current uncertainty in the market could also force a relook at restrictive scope clauses that the M100 was designed to meet.
Says Morris: “Given that regional jets offer [the] lowest trip cost of any commercial jet, in a market where demand is weakened airlines may move to smaller aircraft to protect and operate thinner routes in their network. Thus, the threatened financials and weak demand environment offer airlines an opportunity for scope renegotiation and relief.”
However, these opportunities would come to naught if Mitsubishi does not seize them.
Mitsubishi, says Ascend’s Morris, has to first eliminate the “constant development delays” that plague the programme.
“They really need to communicate a clear programme schedule to the market which this time they will deliver. The market has become used to their continued changes and failure and this seems to me to be the last chance saloon,” says Morris.
Adds Aboulafia: “Beyond all this chaos, there’s certainly room for two modern products. Embraer is one, SpaceJet is the other, and there are zero signs of a third. That should be encouraging to [Mitsubishi], if they can take the long-term view.”
