Mitsubishi Heavy pulls plug on long-troubled SpaceJet project

Bloomberg

Mitsubishi Heavy Industries Ltd. finally ended the development of its SpaceJet aircraft — a domestic short-haul jet that was to supply local carriers including ANA Holdings Inc. — after spending hundreds of millions of dollars on the project.
Tokyo-based Mitsubishi Heavy lacked the understanding and technological know-how for SpaceJet to materialise, Chief Executive Officer Seiji Izumisawa said at a briefing. Growing pressure to electrify and decarbonise, among other factors, forced the manufacturer to reassess its strategy,
he added.
Lockheed Martin Corp and Raytheon Co. are among more than 70 international aviation companies withdrawing from Asia’s largest aerospace and defense conference in Singapore as concerns mount over the coronavirus outbreak.
Mitsubishi Heavy, which makes machine parts for military and commercial use as well as ships and engines, spent the past 15 years developing the SpaceJet M90. It was supposed to be its foray into short-hop flights across the archipelago — a largely untapped market too small for the bigger carriers. The 90-seater plane would have been Japan’s first homemade jet in half a century.
“Large amounts of time and money were spent on this project,” Izumisawa said. “Because of the pandemic and a subsequent dearth of pilots, the future of the regional travel industry remains opaque.”
The SpaceJet M90 was originally scheduled to be delivered to ANA in 2013. Following the project’s sixth and final delay, however, ANA indicated it would seek compensation for the postponements.
“ANA was supportive of the program and we fell short of their expectations,” Izumisawa said. “And for that we apologise.”
In June 2020, Mitsubishi Heavy purchased the CRJ Series aircraft program from Canada’s Bombardier Inc. for $550 million but in October of that year, SpaceJet was put on hold entirely amid ballooning costs and the global pandemic. All told, some ¥1 trillion ($7.6 billion) was earmarked for the project.
Mitsubishi Heavy, which also reported third-quarter financial results, will instead pursue domestic aircraft manufacturing via other avenues, including in partnership with its subsidiary companies, it said.
The company’s profit for the nine months through December 31 came in at ¥105.3 billion, up 30% year-on-year. For the full year ending March 31, Mitsubishi Heavy expects profit from business activities of ¥200 billion and net sales of ¥4.1 trillion.