At the time it made a lot of sense. The Far Eastern economy was sound and there was a gap in the market for a mid-size commercial jet at just under 100 seats. Mitsubishi’s USP was a 20% reduction in fuel costs thanks to the Pratt and Whitney new-generation engines the jet, the MRJ, would be using. The jet was scheduled for launch back in 2014, however things have not gone according to Mitsubishi’s planned schedule. Mitsubishi have invested US$1.9 billion to create a jet valued at US$42 million. To recoup its investment Mitsubishi had estimated selling 2,000 units in order to succeed.
It might have had a chance of a good start, but delays caused by design and development problems means that the jet is three years behind its projected launch date, and this has allowed the competition, like Embraer, to catch up. The Mitsubishi MRJ is now scheduled for launch with the delivery of its first jet in 2017, so Embraer are now only one year behind with their E-Jet E2. “The E-Jet E2 will produce economics every bit as competitive as the MRJ, despite the lack of clean-sheet design,” said Rob Morris, Head of Consultancy at aviation market specialist Ascend. Basically Mitsubishi have blown pretty much all their first-to-market advantage and must rely on how well received the jet is by the first customers. To date there are 191 orders in place for airlines including Japan Airlines, as well as Trans States and Sky West, two US regional groups. Embraer have advanced orders of over 1,000 E-Jet E2s.
It is a long way from the 2,000 orders Mitsubishi will need. Over the next 20 years they have predicted a demand for 5,000 of this mid-sized aircraft of which they intend to capture a market share of 50%. Ascend, however, are less optimistic with both numbers, and have estimated demand to be a little over 4,000 aircraft over the next 20 years, and Mitsubishi gaining a more realistic 20% share, or 800 aircraft, a long way short of the 2,000 needed. The chances of Mitsubishi coming out of this intact are slight, but Japan does have a solid reputation for supplying airline parts. Currently Mitsubishi has a major work-share project with Boeing which involves the 767 and 777 aircraft models. Additionally Mitsubishi supply 35% of all carbon composite parts for the 787 Dreamliner. As Richard Aboulafia, Vice President of Analysis at consultancy Teal Group puts it, “”A regional jet won’t be nearly as important, in terms of profits and technology development, as Japan’s hugely important role as an aerostructures provider, particularly to Boeing.”
Learn more on how AviTrader can expand your market
Please contact
Tamar Jorssen
Vice President Sales & Marketing
+1.778.213.8543
[email protected]
Mailing Address
AviTrader Publications Corp.
Suite 305, South Tower
5811 Cooney Road
Richmond, BC V6X 3M1
Canada
[email protected]
Mailing Address
AviTrader Publications Corp.
Suite 305, South Tower
5811 Cooney Road
Richmond, BC V6X 3M1
Canada