Nikkei reports that Mitsubishi is doing a “re-do” on the MRJ70. The focus on the US market, with its scope clause restrictions. That it took the company this long to get here is remarkable. But then again the program is so late. First deliveries were initially planned for 2013.
The delays in the program have turned out to be a fabulous change in fortune of the MRJ. Had the MRJ90 been delivered on time, the program might have stalled long ago. The order book is anemic (to be polite). The MRJ90 cannot work in the US regional market unless flown by mainline airlines and their pilots. The need for the smaller MRJ70 should have been the primary focus all along. After all, over 70% of the world’s regional jets fly in the US.
Now we can expect to hear all about the Space Jet in Paris. Nikkei reports US production, US suppliers and a sharp price. Good – US regional airlines won’t pay for expensive new aircraft. Recent orders for regional jets have been made by major airlines buying for their regional partners. These strategic changes are significant and reflect, perhaps, the new management recognition of how the market really is. Long gone are the days when the big SkyWest order was announced at an airshow and the customer wasn’t even in the room!
The Space Jet (it’s not clear if this name applies only to the MRJ70) looks like getting its type certificate in 2022. Deliveries may occur after that.
The passage of time has worked in favor of the MRJ70/Space Jet. The thin margins for US regionals made these airlines wary of spending money on new aircraft. This is also reflected in the way Bombardier and Embraer have worked in the market. Bombardier has only tweaked its cabin for the CRJ. Embraer‘s E175-E2 program has been quietly slid to the right because no scope clause relief is in sight. The Embraer E-175 has done exceptionally well, offering operators what they need – a reliable and cost-effective tool. The CRJ soldiers on waiting for orders or a new owner – we’ll find out more after the Paris show no doubt.
How will airlines react to the Space Jet? We anticipate the US regional orders from SkyWest and Trans States will convert from MRJ90 to Space Jet. After all, these two got launch pricing. The airlines need at least two OEMs to choose from and they don’t care too much if it’s Bombardier/Embraer or Embraer/Mitsubishi. But, it is also to be expected that airlines are wary of the Mitsubishi track record. A visit to the MRJ90 at last year’s airshow showed how well made the MRJ is. However, the real test of a program is its industrialization. Mitsubishi is a well-known quantity as a Boeing vendor. To date, the MRJ program hasn’t been what was expected from Mitsubishi. The program needs some serious confidence building.
We await the market reaction. Mitsubishi has its work cut out to restore program confidence. Embraer won’t stumble as it delivers its highly admired products. Bombardier is in a holding pattern, benefitting from any Mitsubishi stumbles.