Bloomberg News

Mitsubishi to Open Aircraft Quality-Control Center on Delays (2)

September 02, 2013

Mitsubishi Aircraft President Teruaki Kawai

Teruaki Kawai, president of Mitsubishi Aircraft Corp., poses with a model of the company's Mitsubishi Regional Jet (MRJ) passenger aircraft after an interview in Tokyo. Photographer: Akio Kon/Bloomberg

Mitsubishi Heavy Industries Ltd. (7011)’s aircraft unit, building Japan’s first passenger jet, will set up a quality-assurance center in Europe after pushing back the delivery of the aircraft by more than a year.

Mitsubishi Aircraft Corp. will open the center in a couple of months and is considering locations including in Germany, where suppliers are based, President Teruaki Kawai said in an interview in Tokyo. It will be the second such center overseas after the company opened one in Illinois in June to strengthen its collaboration with suppliers.

The company said Aug. 22 it postponed at least for the third time both the test flight and delivery of the passenger plane after delays in certification. U.S. customers SkyWest Inc. (SKYW:US) and Trans States Holdings have pledged support to Mitsubishi as it attempts to break into the regional-jet market dominated by Bombardier Inc. (BBD/B) and Empresa Brasileira de Aeronautica SA.

“We need to bolster our foundation, as Japan has never made a passenger jet,” Kawai, 65, said on Aug. 30. Mitsubishi counts on the centers to respond swiftly to various qualification tests and inspection to ensure quality, he said.

Overseas suppliers including United Technologies Corp. (UTX:US)’s Pratt & Whitney and European Aeronautic, Defense & Space Co.’s Eurocopter, contribute about 60 percent of the Mitsubishi Regional Jet aircraft’s parts, according to the company.

Mitsubishi Heavy gained the most in a month, rising 2.8 percent to 554 yen in Tokyo trading. The stock has added 33 percent this year, compared with a 31 percent advance in the Nikkei 225 Stock Average.

Delivery Delays

“Investors reacted positively to this news as it’s a good move,” said Mitsuo Shimizu, a Tokyo-based analyst at Iwai Cosmo Holdings Inc. (8707) “There are high expectations for the jet.”

Mitsubishi Aircraft, based at Nagoya, Japan, said last month it will hand over its first plane in the second quarter of 2017, instead of an earlier plan to deliver by March 2016. The plane’s initial test flight has been delayed to the second quarter of 2015 as against in the last three months of this year. The schedule was changed because of delays in certification, it said at the time.

In April 2012, it had announced postponement in the schedule citing delays in fabrication processes and completion of technical studies. In 2009, delivery of the plane was pushed back amid design changes.

The manufacturer is building 78- and 92-seater versions of the regional jet to compete with planes from Bombardier and Embraer as it forecasts global demand for 5,000 similar-sized aircraft over the 20 years to 2030.

Mitsubishi Aircraft targets to win 2,500 orders, or half of the demand, Kawai said.

Firm Orders

The aircraft maker, 10 percent owned by Toyota Motor Corp. (7203), has orders for 325 aircraft. The planes use variations of an engine being developed by Pratt & Whitney that will help cut fuel consumption by 20 percent.

Last month, U.S. commuter carriers SkyWest and Trans States said they are in talks about a new timetable with Mitsubishi Aircraft after it pushed back deliveries.

SkyWest, a commuter carrier that serves as a partner of United Airlines, committed a year ago to 100 of the Mitsubishi planes, valued at $4.2 billion. Trans States, based in St. Louis, agreed in 2009 to purchase 50 Mitsubishi jets with options for 50 more.

To contact the reporters on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


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Companies Mentioned

  • SKYW
    (SkyWest Inc)
    • $8.77 USD
    • -0.08
    • -0.91%
  • UTX
    (United Technologies Corp)
    • $105.89 USD
    • -0.58
    • -0.55%
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