Mitsubishi to Manufacture Regional Jets

TOKYO - Mitsubishi Heavy Industries is going ahead with its mid-sized regional jet — the first "made in Japan" passenger aircraft in three decades.

The announcement from the company President Kazuo Tsukuda came Friday, a day after major Japanese carrier All Nippon Airways placed the first orders for the twin-engine aircraft that seats about 70 to 90 people.

ANA ordered 15 of the jets from Mitsubishi Heavy Industries Ltd. on Thursday for delivery from 2013, with an option for 10 more.

Mitsubishi, a Japanese machinery maker, has been testing out the response to the jet — which would face tough competition from Bombardier Inc. of Canada, Brazil's Embraer SA and companies in China and Russia developing mid-sized jets.

Tsukuda said the project must include government commitment because of its potential importance to the nation's economy as well as its great risks. But he said the jet has potential to contribute to Japan's technological prowess.

"We believe the aerospace business will be a pillar of our nation's industrial might," he told reporters at Tokyo headquarters.

The Mitsubishi Regional Jet, or MRJ, is a lightweight carbon-fiber composite jet is designed to consume about 20 percent less fuel than comparable standard jets.

Mitsubishi officials said its fuel-efficiency is an asset at a time when fuel prices are soaring, and the aircract is also designed to reduce noise, as well as be comfortable for passengers.

Demand for smaller jets is expected to rise over the next 20 years in regional markets. Mitsubishi's main target markets are North America, Europe and Japan.

Tsukuda acknowledged challenges remain because the company has yet to receive launch customers other than ANA, although it approached some 100 airlines.

But he sounded upbeat, saying that response had been good from carriers in the U.S., Southeast Asia and other regions.

He also said he is counting on "government support." He did not give an amount for the cash or other specifics for what he was expecting.

Japan Airlines, the nation's other major airline, has said it is considering the MRJ but won't oder any for now as it has already ordered 10 Embraer 170 jets.

Mitsubishi officials said they were hopeful JAL will order the jet a few years down the road.

The jet will be Japan's first nationally funded, domestically manufactured passenger aircraft project since the YS-11, a turboprop airplane that was discontinued in 1973.

ANA, which said the MRJ was chosen for reasons of safety, overall economy, passenger comfort and performance, estimated the value of its order at 60 billion yen ($600 million), based on the catalog price of 4 billion yen for each aircraft.

ANA said use of the plane would result in an annual sales increase of 5 billion yen ($50 million).

The jet's first deliveries could come as soon as 2012. Mitsubishi — part of a major Japanese conglomerate that includes an automaker, electronics maker and trading company — has chosen Pratt & Whitney, a unit of United Technologies Corp., as the MRJ's engine supplier.

Development costs are estimated at about 150 billion yen ($1.5 billion).

Mitsubishi has been a longtime Boeing partner, supplying the wing box for the 787 and other aircraft.

The expansion at Tokyo's Haneda airport in 2010 is expected to provide opportunities for carriers to expand their businesses, increasing the demand for mid-sized jets.


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