Mitsubishi Seals MRJ Deal With SkyWest
Mitsubishi Aircraft has officially broken the Bombardier-Embraer duopoly for regional jets in the U.S. with its confirmation on Thursday of a firm order from SkyWest Airlines for 100 MRJ90s worth $4.2 billion at list prices. The contract calls for deliveries of the aircraft on firm order to start in 2017, while the first of another batch of 100 airplanes on which SkyWest holds options would start in 2021.
Mitsubishi and SkyWest announced an “agreement in principle” covering the larger of the pair of regional jets under development by the Japanese company during the Farnborough International airshow in July 2012, some five months after the program suffered a serious hit to its credibility with the announcement of a year-and-a-half-long program delay. By that time Mitsubishi had already signed a letter of intent with St. Louis-based Trans States Airlines in December 2010 calling for an eventual order for 50 MRJs. A further 18 months passed before the Japanese company could confirm any further significant commercial activity in North America.
“This is the market we’ve been targeting all along,” Mitsubishi Aircraft vice president of sales Hank Iwasa told AIN. Restrictions in U.S. major airline union contracts that limit the size of airplanes that regional airlines may operate have long hindered the company’s efforts to break into the U.S. market, but Iwasa expressed confidence that one or more of SkyWest’s major airline partners would negotiate less restrictive scope clauses by the time the first MRJ gets delivered.
The MRJ90 holds 92 seats in a single-class configuration, but SkyWest could opt for a dual-class cabin that would likely hold closer to 80 seats, said Iwasa. U.S. scope clauses typically limit the size of regional jets to 76 seats.
The contract, which gives SkyWest the option to convert part of its order to positions on 76-seat MRJ70s, calls for delivery of all 100 airplanes over a three-year span, between 2017 and 2020. By that time, said Mitsubishi Aircraft CEO Hideo Egawa, the company expects the MRJ’s production rate to reach “four or five” per month.