Mitsubishi Aircraft Unveils Japan’s First Passenger Jet

Japan’s first passenger jet was unveiled today after a delay of almost four years, with a helping hand from bullet-train specialists as test flights were set for next year.

Lights flashed and traditional Japanese taiko drummers pounded out the beat as Mitsubishi Aircraft Corp. revealed the regional jet in a hanger at Nagoya airport. About 500 people, including the presidents of customers ANA Holdings Inc. (9202) and Trans States Airlines Inc., suppliers and government officials attended.

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“This will give a big lift to Japan’s aviation industry,” Akihiro Nishimura, a vice minister of transport, told reporters at the ceremony.

Mitsubishi is building 78- and 92-seat versions of the plane, developed at a cost it estimates at 180 billion yen ($1.7 billion). The company plans by June to conduct a first flight of the jet, designated MRJ, with the larger model available first.

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“It’s taken a lot of hard work to get to this,” ANA President Shinichiro Ito told reporters at the event. “We’re looking forward to getting the plane in 2017.”

Japan and China are leading an Asian race to break the hold of Embraer SA (EMBR3) and Bombardier Inc. (BBD/B) on the market for small passenger jets. With the Chinese project also delayed, Mitsubishi’s Pratt & Whitney turbofan-engined MRJ will be a test of whether a new entrant can successfully break into the small group of leading aircraft manufacturers. Boeing Co. and its European rival Airbus Group NV dominate the market for larger passenger planes.

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‘First to Market’

“Despite delays, the MRJ is still poised to be first to the regional jet market with a next-generation engine,” said Richard Aboulafia, a vice president of Teal Group, a Fairfax, Virginia-based consultant.

One advantage Mitsubishi has is an order book, including options, for 407 jets. ANA will be the debut carrier, and three more airlines became customers this year, boosting the tally to six.

While the order book is a good start, Aboulafia said, the MRJ program needs to prove it can be competitive even against the market leader.

Mitsubishi Aircraft targets winning half the global market for regional aircraft over the next 20 years as Bombardier focuses on its new CSeries jets, also delayed, which will be able to carry as many as 160 passengers.

‘Set Above’

“What really sets them above the rest is the technology,” Richard Leach, president of customer Trans States, told reporters at the ceremony. The MRJ will be four years ahead of Embraer’s planned upgrade to a family of E2 jets with new engines, he said.

The world fleet of jets seating 70 to 130 passengers will increase to about 6,580 by 2033, from 3,850 last year, as travel demand increases, according to forecasts from Brazil’s Embraer.

China and Russia are also competing for regional jet orders. China will deliver its first ARJ21-700 to Chengdu Airlines by the end of this year, provided the aircraft receives an airworthiness certificate, the China Daily reported in December.

Russia’s Sukhoi SuperJet 100, built by a joint venture between Moscow-based United Aircraft Corp.’s Sukhoi and a unit of Italy’s Finmeccanica SpA, started flying commercially with OAO Aeroflot (AFLT) in 2011.

Tightening Control

Mitsubishi Aircraft, based in Nagoya, brought in railway project managers from parent Mitsubishi Heavy Industries Ltd. (7011) to tighten control of the regional jet development and help overcome development bottlenecks that slowed the plane’s introduction by about four years. The company has boosted the number of engineers on the project by 30 percent to 1,300, President Teruaki Kawai said earlier this year.

“If the MRJ can be flying the skies in Japan by the Olympics it will certainly give a boost to Japan’s economy,” Yoshiharu Ueki, president of Japan Airlines Co., told reporters at the event, referring to the 2020 Tokyo Games..

Mitsubishi in 2008 announced plans to build Japan’s first passenger jet and has since pushed back the date for test flights three times. The company expects global demand for regional jets to be about 5,000 planes over the two-decade period to 2030.

Japan’s Honda Motor Co. (7267) is developing a small business jet that can seat up to six passengers, and is set to be delivered to customers next year. The company says it’s won two to three years of orders for what it calls a “flying sports car.”

To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editors responsible for this story: Stanley James at sjames8@bloomberg.net Jim McDonald, Ken McCallum

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