Aug. 15, 2016, © Leeham Co.: Mitsubishi Aircraft Corp. (MAC) is about to dramatically ramp up its flight testing of the MRJ-90.
Media has been alerted to an all-day event next month, complete with a tour of the Moses Lake (WA) facility, where test airplanes will be based.
The program is two years behind schedule for the brand new design, the first commercial airliner produced by Japan since the YS-11 turboprop more than 50 years ago.
The program added two new customers within the last year. Aerolease Corp, a lessor, and Rockton AB of Sweden each ordered 10 and optioned 10, bringing total orders and options to 243/204.
But the customer base is still small. There are only eight. The customer concentration is also small. Fully 150 of the firm orders are with SkyWest and Trans States airlines of the USA. These two carriers also hold 150 of the options.
The MRJ-90 exceeds the weight limits on the labor contracts of the airlines SkyWest and Trans States serve, the so-called Scope Clause. Unless this is relaxed, it’s unclear what will happen with these two orders that dominate the backlog.
MAC said it can provide the smaller, lighter MRJ-70, but little development appears to be going on for this model.
Despite the question mark over the Scope Clause, LNC sees the MRJ as the principal competitor to the dominant Embraer EJet family.
Bombardier’s CRJ family is aging and while BBD works to update the aircraft, the passenger experience in the EJet and the MRJ is and will be superior. BBD claims superior economics. We haven’t run this analysis for some time, so we don’t have an independent opinion.
We believe EMB and MAC will come to dominate the 70-100 seat sector in the years to come, with the CRJ eventually fading. Actually, we don’t see a future for the 70-seat jet. EMB dropped the E-170 with its E2 family, BBD isn’t selling the CRJ700 and MAC as yet hasn’t proceeded with the MRJ-70.
This means that if MAC wants a family of airplanes, it has to go up, not down, in size. This suggests an “MRJ-100” or “MRJ-110” at some point, placing the MRJ across from the E190-E2 and BBD CS100.
With the reports last week that Greg Smith, CFO of The Boeing Co., further telegraphed the prospect of a stable production rate at 12/mo for the 787 instead of a boost to 14/mo, and the possible rate cut of the 777 below the 5.5/mo previously announced, I’m struck by the subtle changes in Boeing’s candor.
This follows the revelation that at long last, Boeing considers the termination of the 747 program as a real possibility.
Under previous CEO Jim McNerney, Boeing was well known for seeing everything through rose-colored glasses right up to the moment it didn’t.
Under McNerney’s successor, Dennis Muilenburg, there has been an evolving move toward more transparency and acknowledgement that the reality is different than the messaging.
Some aerospace analysts on Wall Street disagree and still say Boeing is less than candid. I don’t necessarily disagree on certain issues. But I do see an evolution.
Muilenburg’s willingness to take forward losses and charges that McNerney should have but wouldn’t is stepping up to reality.
I still believe write downs on the deferred production for the 787 are necessary, as do some others. So far Muilenburg hasn’t been willing to entertain this, at least publicly.
Nevertheless, Muilenburg is demonstrating a very different approach than McNerney. For this, he deserves credit.