MHI puts SpaceJet on ice as it looks to cut costs

Mitsubishi Heavy Industries (MHI) has announced that it is halting its SpaceJet program which would have seen Japan produce its firs commercial aircraft for over 50 years. The result will see a 50% drop in staff numbers within its commercial aviation sector, while enabling the company to reduce annual costs by 120 billion yen (US$1.15 billion). Staffing changes will include the reduction of 2,000 jobs overseas, 3,000 employees moved internally, and a further 1,000 employees moved to outside companies.

“We will work to review where we stand, make improvements and assess possible program restart,” MHI said in its business plan for its regional jet. MHI has posted a 62.5% decline in second-quarter operating profit to 12.7 billion yen, while it expects a 50 billion yen ($478 million) operating profit, appreciably better than an earlier forecast of no profit.

The Spicejet was originally scheduled to launch in 2013, but the project has been continually beset by design and technical problems, which has seen that schedule delayed six separate times. Japan’s ANA holdings had ordered 23 of the SpaceJets, but like so many airlines it has seen profitability challenged by the COVID-19 pandemic and is now looking to reduce its fleet by 10% instead.

There was good news for MIH though as it also announced that Japan had chosen the company to develop a new stealth fighter, which should be ready by the mid-2030s and which has a current budget of US$40 billion.

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