This story is part of AIN's continuing coverage of the impact of the coronavirus on aviation.
Mitsubishi Heavy Industries (MHI) is suspending the development of its SpaceJet M90 airliner in a bid to stem steep losses. On Friday, the Japanese group announced the move as part of a revised medium-term business plan, saying it will continue some work on type certification documentation with a view to possibly resuming the program at some point in the future.
In financial results for the first half of the current fiscal year, MHI reported a 12 percent group-wide decline in revenues to ¥1,658,6 billion ($15.9 billion). However, in the wake of the Covid-19 pandemic’s negative impact, the group sustained a pre-tax loss of ¥72.8 billion, of which its aviation, defense, and space division accounted for ¥66.3 billion.
Earlier this year, Mitsubishi Aircraft halted plans to conduct flight testing of the 88-seat M90 twinjet in Moses Lake, Washington, and also shelved development work on the 76-seat M100. In the October 30 announcement, the company did not give a revised target date for completing M90 certification, which has already fallen behind multiple times since the launch of the program in 2008. The most recent target date was mid-2020.
“Given the current development status and market conditions, we have no choice but to temporarily pause the majority of SpaceJet activities, except for type certification documentation,” said MHI in its "2021 Medium-Term Business Plan" running through 2023. “We will work to review where we stand, make improvements, and assess a possible program restart.”
In June, MHI announced plans to halve funding for the SpaceJet program after Mitsubishi Aircraft incurred costs totaling ¥263.3 billion, in part through the acquisition of Bombardier’s CRJ regional airliner program. Under the revised business plan, the company intends to expand plans to provide maintenance, repair, and overhaul to the existing CRJ fleet.
MHI now expects the air transport market will only begin recovery from 2024. It said it will remain active in the aerostructures sector through a plan to “increase production efficiency and drive forward new technology development to participate in future global aircraft programs.”
The announcement from MHI makes no mention of possible layoffs in the wake of the M90 program suspension, but its recovery plan refers to targeted initial cost savings of ¥120 billion. Under a reorganization announced in May, 35-year company veteran Yasuhiko Kawaguchi was named as executive chief engineer for Mitsubishi Aircraft, replacing chief development officer Alex Bellamy as head of the M90 program, reporting to the subsidiary’s president Takaoki Niwa.
In early February, MHI confirmed the most recent in a series of delays to the program caused by extensive design changes and other engineering issues, indicating that type certification would be pushed back at least until 2021. In January 2017, the company had pushed back a target date for first deliveries to launch customer All Nippon Airways from mid-2018 to mid-2020, at which point it would have already been seven years behind the original target of 2013.