Japan's home-made jet to cost 30% more as delivery delayed

[TOKYO] Mitsubishi Heavy Industries Ltd said the cost to build Japan's first locally made passenger jet will jump about 30 per cent after the conglomerate announced its fifth delay in delivering the plane to a customer.

The Mitsubishi Regional Jet will be handed over to launch customer ANA Holdings Inc in 2020, two years later than the current estimate, according to a statement in Tokyo from the owner of plane maker Mitsubishi Aircraft Corp on Monday. The postponement is due to "revisions of certain systems and electrical configurations" to meet the latest requirements for certification, it said.

"We're explaining everything in detail to our stakeholders," Mitsubishi Heavy's Chief Executive Officer Shunichi Miyanaga told reporters in Tokyo on Monday. "We're facing the risks and taking a forward-looking attitude." Development costs have already tripled to as much as US$5.3 billion, Chief Financial Officer Masanori Koguchi said in June, underscoring the challenges confronting the aircraft. The MRJ, which is aiming to challenge Brazil's Embraer SA and Canada's Bombardier Inc. in the market for aircraft with fewer than 100 seats, has flown three planes to the US for testing, following setbacks last year.

Mitsubishi has 447 orders for the aircraft, including options and purchase rights. ANA, the operator of Japan's biggest airline, said it was "disappointed" at this latest delay, but will continue to support the development of the jet as its launch customer.

"We remain confident of the benefits the MRJ will bring to the ANA fleet in terms of performance and passenger comfort," the carrier said in an e-mail statement. It has 25 of the planes on order, including options.

Other prospective customers include US carrier SkyWest Inc, with an order for 200 planes including options, making it the biggest for the MRJ. The Nagoya-based plane builder also has as many as 100 orders from Trans States Airlines Inc, also based in the US.

The jet, which can seat as many as 92 people, made its first flight in 2015 and won its first order from a European company in February.

Japan's last locally produced commercial aircraft was the YS-11, a turboprop made by Nihon Aircraft Manufacturing Corp, a consortium that included Mitsubishi Heavy, Kawasaki Heavy Industries Ltd and Fuji Heavy Industries Ltd. Production was stopped in 1974 after 182 of the planes were sold.

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