Japan to roll out aerospace hope with first commercial jet in half a century

Fri Oct 17, 2014 4:26am EDT
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By Tim Kelly and Siva Govindasamy

TOKYO/SINGAPORE (Reuters) - Mitsubishi Aircraft will roll out Japan's first commercial jet in more than 50 years on Saturday, amid doubts its ambition to sell more than 2,000 of the planes can match reality in the market segment.

Developed for $1.9 billion by a subsidiary of Mitsubishi Heavy Industries that includes Toyota Corp as a shareholder, the $42 million regional jet, with just under 100 seats, is Japan's second bid at breaking into the commercial aircraft market.

The last attempt in the 1960s, which failed, was a 64-seat turboprop dubbed the YS-11. Only 182 planes were ever built.

Mitsubishi has so far won 191 firm orders from customers including U.S. regional groups Trans States Holdings and SkyWest Inc, and Japan Airlines Co Ltd.

That, say analysts, is below the several hundred planes it will need to sell to break even and far behind the number of orders it will need to overtake market leader, Brazil's Embraer SA.

That goal presents a "significant challenge," said Rob Morris, head of consultancy at aviation market specialist Ascend.

The MRJ's biggest selling point, Mitsubishi says, is the ability to burn 20 percent less fuel than aircraft of similar size thanks to new-generation engines from Pratt & Whitney, a subsidiary of United Technologies Corp.

The plane, however, is already three years late because of design and development problems allowing Embraer to catch up. For Mitsubishi, it means a sprint to complete flight tests before the first delivery in June 2017 to ANA Holdings Inc.   Continued...

Japan's Mitsubishi Heavy Industries' logo is pictured outside the company headquarters in Tokyo December 17, 2012. REUTERS/Yuriko Nakao