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Leeham News and Analysis
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Pontifications: By accident of timing, convergence of events, Mitsubishi is now well positioned to become major RJ player
May 13, 2019, © Leeham News: The regional jetliner industry is on the cusp of a major shift.
Bombardier is exiting commercial aviation. The company already is under contract to sell the Q400. It’s CRJ program is for sale, or lacking any, inevitably headed for termination.
Embraer agreed to spin off its Commercial Aviation division into a new joint venture with Boeing. Its E-175 E2, designed with changes to the US Scope Clause in mind, is too heavy to comply with contract restrictions. The predecessor, the E-175 E1, is Scope-compliant but it also is aging technology.
Neither the Sukhoi SSJ100 nor the COMAC ARJ-21 are serious competitors.
Mitsubishi, beset by five of delays that pushed its MRJ90 seven years behind schedule, has been dismissed by most as too little, too late, too heavy and not Scope compliant.
Yet MITAC, as Mitsubishi Aircraft Corp is known, has quietly reworked the MRJ into a Scope-compliant “concept” aircraft that will be revealed at the Paris Air Show next month.
Officials said the aircraft, the name for which hasn’t yet been revealed, will be the only new generation, Scope-compliant aircraft, positioning Mitsubishi to become a key player in the regional aircraft industry.
Teasing reveal
Executives teased the concept aircraft at the official grand opening Friday of its new offices in Renton (WA).
LNA’s Bryan Corliss reports on the details today. In a nutshell, the concept aircraft—this is what it’s called, for now—is billed as a combination of comfort and economy, something that OEM’s pretty much always say.
What is more significant, from an industry perspective, is that MITAC is on the cusp of becoming a key player in the RJ industry.
Embraer in transition
Embraer is in transition. E2 family sales have been slower than hoped and the future of the E-175 E2 has doubts hanging over it because it’s not Scope-compliant. What Boeing plans to do with the joint venture, in which it will own 80% and have governing control, remains a matter of speculation. (Perhaps some indication will come when EMB hosts reporters this month for its pre-Paris Air Show briefing.)
MITAC points out that there is a surge RJ retirements coming next decade for which the MRJ, in its Concept and MRJ90 will benefit. The same is true for Embraer’s E-Jet. The E-190/195 E2 is not suited for the Scope-restricted US market, but there are very few pilot contract restrictions elsewhere.
The E-175 E1 is Embraer’s continuing answer for the US market, but it’s equipped with old generation engines that have high maintenance costs. MITAC officials clearly expect their airplane, with the Pratt & Whitney Geared Turbo Fan, will have a significant economic advantage that will render the E1 obsolete.
NewCo’s future
With no information coming from Boeing or Embraer yet about the future of the new JV, or NewCo as it is called for now, speculation is widespread about what the company’s future will be.
It’s been acknowledged that Embraer’s engineering resources will play a key role in the Boeing NMA program, should Boeing launch the New Midmarket Aircraft. Undoubtedly the JV will also become a key supplier, given Boeing’s trend toward vertical integration and Brazil’s lower cost base.
But what of the E2 future and new airplanes from Brazil?
There has been market speculation for months that the E-175 E2 may not be built. There is a notable absence of information from Embraer about the progress of the production of the first flight test airplane.
The MOU for the JV assigns NewCo with the responsibility for all new Boeing airplanes of 150 or fewer seats, but what does this mean?
A new jet, following the E2, will be at least a decade away. Boeing officials don’t want to do two concurrent airplane programs after the financial debacles of the 787 and 747-8 concurrent development; NMA will take precedence over an “E3.”
It’s known that Embraer has been talking with the market about a new, advanced turboprop of 70 and 90 seats. But the market demand is small and the ROI economics are challenging, especially in today’s relatively low fuel-price environment.
Is Boeing really going to want to get into the turboprop business? This is questionable.
Major shift
With doubts over the E-175 E2, an aging E-175 E1, Bombardier’s pending exit from commercial aviation and poor market penetration from Sukhoi and COMAC, MITAC appears emerging to be well-positioned to become a key player in the regional jet industry.
Although hardly intended, the seven years of delays and painful development of the MRJ actually have worked to Mitsubishi’s benefit. Had the plane been on time with an entry into service in 2013, the market forces it would have faced then would have been far different than they will be when the MRJ90 enters service next year. A convergence of events now means MITAC is poised to be part of a duopoly, not player No. 3.
The homepage of https://leehamnews.com/
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Didn’t last long. 🙂
Likely a DNS error outside the control of LNA
Wait, the MRJ90 is still not scope clause complaint right?
The article says it is not, Woot.
The MRJ70 with 76 seats is compliant (TBA) US config seating
The MRJ90 ( 88 seats) has the following MTOW
MRJ90 39,600 (87,303) kg (lb)
MRJ90 ER 40,995 (90,378)
MRJ90LR 42,800 (94,358)
Scope varies but a common description is ’76 seats and 86,000lbs MTOW’
With the MRJ , you get E series fuselage width, GTF engine benefits and a full FBW design. A worthy CRJ sucessor , which is why I think Mitsi is in line to buy out/form JV with Bombardier over the CRJ business
an oops. MRJ70 is 76 seats single class , same with MRJ90 is 88 single class. Would have to come down to preferred US style 2/3 class seating. The MRJ90 could do 76 seats multi class
Could we see an “MRJ80” emerging with 76 seats (2 class), weight trimmings and reduced MTOW to give a range of ~1800NM?.
Not sure if versions of the GE Passport and/or RR Pearl could be options.
The MRJ might be a good fit. I guess it would be good of MHI’s determination and thoroughness is rewarded by foreign sales.
I cannot imagine though, Embraer sitting on their hands without re-developing the E175-E2. The market opportunity / customer base is too significant.
They’ll probably somehow redo the 175 to meet scope clause weight requirements. Like Boeing re-did the 737-7 & -9 long after launch, little to loose.
https://leehamnews.com/wp-content/uploads/2016/04/CSeries-1-500-positioning.png
And, even littler to LOSE! LOL
Knowing little about the RJ markets I have been a bit surprised that the competitors all seemed to discount the importance of the scope clauses in the US. As I understand it the market continues to be significant and for Embraer in particular to ignore it seems to be an almost criminally negligent strategic error.
I think its what our infamous economist Allen Geeenspin called excessive exuberance.
Sit around in a circle and convince yourselves the scope is going away and the future is clear.
BBD had the right idea but not the resources to pull it off.
Its wasnt that they expected scope to go away, just increased weights that would allow its new models to comply
And that is different from going away how?
A few typos I think:
>Its E-175 E2, designed with the US Scope Clause in mind, is too heavy to comply with contract restrictions.
Did you intend “designed without the US Scope Clause in mind” or “with changes to the US Scope Clause in mind” ?
> Mitsubishi, best by five years of delays
Should be “Mitsubishi, beset by five years of delays”?
Clearly without the Scope being in affect.
Maybe Airbus will propose MITAC to join into a MRJ Marketing Sales Alliance with Airbus America’s. It doesn’t overlap the A220 or ATR.
Or they can consider putting the PW1700G or Passport20 on the CRJ700 and CRJ900.
That would cost Airbus $1-2Bill / 3-4 yrs. Maybe GE supports 1Billion to protect their after market share in this segment. More damage control actually..
MITAC going alone against the world might be an brave, but weak proposition anyway. Ask Embraer / BBD / Fokker / BAE / Saab / Superjet.
Mitsubishi is a huge company. Deep pockets the others did not have.
The MRJ is more a – Hey, We Make Airplanes To – that a main core of any kind.
Honda is doing the same thing, that over the wing bussiness bird will never make any money.
I’m not sure if Bombardier would be happy with that such an outcome. *
Instead, why couldn’t the Airbus Canada Limited Partnership — formerly the C Series Aircraft Limited Partnership (CSALP) — develop an all new A210-series.
Cross-section: 4 abreast — identical to the cross-section the E-jet family from Embraer.
An A210 family should have an identical cockpit to that of the A220 family — significantly enhancing the attractiveness of both families.
A210-100: 76 seats (single class). MTOW less than 86,000lb — fully in compliance with the restrictive Scope Clauses in the U.S.
A210-300: 96 seats (single class)
A210-500: 120 seats (single class)
–
https://simpleflying.com/bombardier-and-mitsubishi-in-legal-stand-off-over-technology/
That row would be solved on the way.. developing something entirely new would be a waste time and moeny if MITAC already did a good job.
@Keesje
Well, the MRJ is controlled by a yoke, not a sidestick… 😉
Seriously, you’d want to locate in the U.S. (Mobile) as much as possible of the production of the family member (A210-100) that’s in compliance with the restrictive American Scope Clauses.
Future re-engined, UltraFan powered A220s will have as much range as the A320neo (>3500nm). Therefore, UltranFan powered A210s should be optimised for a max range of between 2000 and 2500 nm; essentially obliterating the competition (Embraer/Boeing E-Jets, MRJ etc.)
Also, by developing an A210 family, Airbus would be utilising the know-how acquired through the A220 programme. In short, the A210 should be a scaled down A220.
Furthermore, the development of an A210 family would help keep the Canadians/Alabamians happy. Strategically speaking, such a move would help Airbus making further inroads into the US market (A210-100), without having to be held hostage to the whims of U.S. trade policy.
While the A210-100 would be optimised for the U.S. regional market, the A220-300/-500 should be highly competitive in the global market place.
Correction.
Should read:
why the heck would they re-engine to UF? I mean, I understand you are an UltraFan-Boy (tee hee I made a bad joke!) but technically, why would they switch to something that is basically a science experiment (and one that is targeted at widebodies to boot), when GTF v2 or v3 will provide equal economics, less risk and is aimed at squarely the single aisle market?
PW + PIP1 is already delivering ~5% better than spec (which Leap is just meeting) with a relatively low tech hot section. judicious tech insertion in the hot section and second gen 3d Aero should give another 5% easily.
@bilbo
UltraFan or 2nd gen PW GTF.
Meanwhile, Rolls’ test site for up to 140,000 lb thrust UltraFan engines is on track for testing of the UltraFan demonstrator in 2021.
https://aviationweek.com/propulsion/rolls-test-site-140000-lb-thrust-track-ultrafan-2021
–
BTW, 140,000 pounds of thrust is more than enough for an all composite A380-derived twin engined VLA — i.e. composite fuselage (based on A350 technology and A380 architecture) and all new high aspect ratio wings. MTOW of about 450,000 kg (100 metric tonnes more than the 777X).
Hence, an 80 meter long, all composite (i.e. composite content > 53%), A380-derived VLA with a MTOW of 450 tonnes would require wings with a total wing-area of between 680 m2 and 700 m2 and two engines with 135,000 pounds of thrust.
In contrast, the A380 and 777X has wing areas of 845 m2 and 515 m2, respectively and MTOWs of 576,000 kg and 352,000 kg, respectively.
Perhaps, therefore, Rolls knows something about future planning at Airbus, as 140,000 lb of thrust engines is way more powerful than what would be required for the biggest single deck wide body that’s conceivable.
@ov-999 thank you for making my point the UF is a widebody engine.
also, nobody in their right mind is going to make an A380 sized aircraft for a _loooong_ time. I expect the 779 is about the biggest tube we will see for a long time, and the next generation of VLAs are going to need to be either BWB or horizontal double/triple bubble to provide the compelling economics required to justify the big plane risk.
@bilbo
The UltraFan engine will be suitable for engines powering A319-sized aircraft — or smaller — and scaled-up, UltraFan engines will be able to power a VLA twin, as well.
https://www.flightglobal.com/news/articles/rolls-royce-foresees-broad-applications-for-ultrafa-456250/
–
An 80 metre long, 450,000 kg MTOW UltraFan-powered VLA twin — build using large A350-type composite fuselage panels ( having the same fuselage architecture as the A380 fuselage) and a 700m2 composite wing — would have about 70 percent higher cabin floor area than the 777-9, while burning no more than 10 percent more fuel per trip.
It seems to me that such an aircraft would totally change the equation with respect to the competitiveness of VLAs.
If significant carbon taxes on aviation fuel is forced on the industry in the near future, double deck VLA twins will become even more competitive as the seat mile cost delta between regular wide body twins and VLA twins would increase further.
once again: scope clauses as currently structured are terrible and stupid..
they should be strictly seat count/leg length based
who really cares how heavy the airplane is if the contract restriction is 74 seats and 1000 NMI? (restricting both capacity and range directly instead of the indirect MTOW restriction)
Scope is a fact of life, and not stupid to the airline pilots.
Clearly the Airlines Pilots see attempt to erode the Scope with heavier than needed aircraft and the arguments that well its really 110 not 76 and we should.
Stupid is you put people lives in the hands of less capable pilots.
Who then move up to better positions being replace by more less capable pilots.
The basic cost is the same to train.
And if they can’t move up you have?
So the world turns.
I am not saying scope clauses themselves are stupid, just the way they are currently structured.
they are good for the mainline pilots, but bad for everyone else in the foodchain.
they hurt the manufacturers (by preventing sales of new tech into the market), they hurt the non-mainline pilots (by keeping their salaries down), they hurt the environment (by forcing the use of old, inefficient tech), they hurt passengers (by making us fly long distances in crappy old planes that just happen to fit the scope clause)
by going to a straight seat count/hard leg length cap they at least undo 3 of those harms.
Bilbo,
It’s not mainline pilots fault that a manufacturer designs a new aircraft that doesn’t comply with scope limits.
It’s not the mainline pilots job to look after non mainline pilot wages.
It’s not the mainline pilots fault that Manufacturers haven’t built a scope compliant, environmentally friendlier airplane.
How exactly is a 175e2 seating any different then the current 175? And how is that a mainline pilot responsibility?
Actually all of the scope issues could be solved by having those aircraft flown by mainline pilots. There wouldn’t be any weight limits or seat limits or mileage restrictions etc…
ah yes, the ever popular “I Got Mine” argument…..
I would argue that it is in the Mainline Pilots’ interest to ensure high wages and good working conditions for Regional Pilots.
1: it is the right thing to do (but who really cares about that in today’s ‘Murica)
2: it reduces the cost advantage of Regional airlines thereby reducing the pressure from the Mainline Airline to offload flights onto their Regional partners
Get a 737/A319 and put it into a premium heavy configuration, 76 seats. According to your version of a modern scope clause, that would now be flown at a regional airline. Pilots aren’t that dumb.
Scope clauses, as currently written are not terrible nor stupid. Folks seem to forget that management has agreed to such restrictions in negotiations. The unions didn’t somehow magically force them.
Weight matters, otherwise they could put a 320/737 sized aircraft on a route with those proposed restrictions. And before you go all “the economics wouldn’t work” doing that, look at what United is doing with the CRJ-550.
So to the mainline pilots, weight definitely matters, in addition to the seat limit.
I think a seat count limit and percentage of fleet limit would be just as good for protecting mainline pilot jobs without hurting the airlines as much as the current scope rules. But I doubt that the rules will change. It just goes to show how much distrust remains between labor and management in the airline industry.
I also wonder if Mitsubishi is too late at this point. Between American, Delta, United, and Alaska, there’s room for maybe 1,000 76-seat jets based on Alaska’s size and the other carriers’ scope clauses. By my count, there have been nearly 400 E175/E175SCs delivered in the U.S. since mid-2013, plus more than 100 CRJ900s. There are about 200 more on order (mainly from Embraer, but a few CRJ900s as well). So unless the legacy carriers are premitted to dramatically expand the size of their large RJ fleets, the new MRJ 70’s total market opportunity in the U.S. through 2030 could be just a few hundred 76-seat jets.
Something like 800 of the larger CRJ planes flying now, counting the smaller E175 as well could get you 1000-1200 worldwide.
Bombardier isnt going to do a clean sheet new design for a CRJ replacement, indeed its more than likely Mitsi will buy out the program for the sales-marketing- servicing business, as it has zero experience or current footprint.
With the MRJ having the same fuselage width as the E-series but a lighter plane ( its not a double lobe fuselage) they have as the story says , the right plane at the right time
If US unions didn’t enforce the scope limits they wouldn’t exist.The rest of the world takes the veiw that having a large aircraft land on your head is a bad thing and there shouldn’t be 2 different standards of pilots separated by an abitary limit and a vast pay gap.Why would anyone effectively ban a certain size of airliner?
It’s total madness, no wonder Embraer can’t believe it wouldn’t just go away. Americans are going to have to get used to not dictating the sizing of regional jets as well as many other things.Anyone under the illusion that the US is a free market economy should be made aware of this lunacy.
Well, you just have to look at the current government to think of Lunacy.
But there there is Brexit.
All countries have their myths, they all go through periods of lunacy, we just hope that
1. We miss them
2. If we can’t miss them survive them.
Looking in the rear view mirror, I kind of see the US as having the Terminator after it. Pavement where you are is nice but things are getting rippped up behind yuou.
I just hope I can eeek out on good pavement, I did my part to do right, up to others to carry the burden now.
Of course China claims the whole South China Sea (ooops, we need a new name eh?) and they are a Near Arctic nation so they will be poking then noses up there as well (climate research you know, not that all those coal plants they have are affecting things of course).
If nothing else the US has never claimed a whole ocean (well two now)
OK,so you don’t care about RJ passengers, but what about people on the ground?
You buys your tickets and they takes their chances!
Generally only people at smaller airports are killed by old fashioned manual control single or light twin aircraft.
When you consider that Boeing has bought Embraer, one would think Boeing is thinking of the synergies in the long term development of the NSA – which is coming maybe a few years earlier than what was their plan six months ago. What is Airbus doing? They appear to be trying to hedge their bets on the CSeries. Just as the Dow dropped 700 points today, things can change. Most of the talk has been about Boeing being left behind. Well, if they let the Chinese or the Japanese handle the entry level planes, Airbus will regret it. GM years ago knew that first you sell them a Chevy, then a Buick, and later a Caddy.
Well the US Auto MFGs are now you buy a truck or a crossover and …..NO SEDANDS!
Not sure how that affects the price of tea in China but …….
Kinda a basic marketing concept. You round out the “Line,” or the product offering. If Boeing / Embraer come up with planes for the NSA from a 70 passenger to a 76, 90, 110, 135, 155, 180 to 240, and then cover all sizes with the wide bodies, and these planes have similar cockpit synergies – that will go a long way with customers.
“Undoubtedly the JV will also become a key supplier, given Boeing’s trend toward vertical integration and Brazil’s lower cost base.”
How can Embraer become a key supplier when its existing business model has most of its E jets airframes built outside of Brazil -. Europe , Asia , US.
Parts of the wing even come from a supplier in Everett!
Very slow coming EIS, too many delay’s and if Embraer can retool the E2-175 to meet the scope, it would capture much of the replacement market for the E175 series. Mitsubishi dropped the ball by misjudging the time from design to production to delivery.
E2 is about 12,000lb over scope while seating about 80 in a dual class configuration. The MRJ-70 is pretty much on max weight but can only seat 70 in dual class.
I think Mitubishi is going to have an easier time squeezing in a few more seats than Embraer will dropping 12,000lb. For example the cargo hold on the MRJ-70 is in the main tube behind the cabin. By shrinking the back hold by 1 seat row and finding some baggage space elsewhere they can fit another 4 seats.
If it was not for scope clauses what would have been the most popular/used RJ in the US?
737/dc-9/717
seriously, the scope clause is the only thing keeping large volumes <100 seat RJs in the air
I don’t understand the argument. For the CRJ-700+ (CRJ-1000 anyone) sure. But there are smaller 50-60 seat regional jets severing small markets. Are those markets now able to fill larger jets, if so are there not new small markets appearing suitable for that size aircraft? Is that segment going back to turbo-props, if so which one, they are all aging as well?
There is a demand for a modern small jet for those routes. It needs to be optimized for quick turn-around, low maintenance in a high cycle environment, field performance and, good economics over short routes.
It will probably have two rear engines. That or be high wing.
there are relatively small numbers of 50 seat RJs in service vs 76 seat scope-max RJs. I would expect that without the scope clause, they would generally opt to upsize and reduce frequencies….
Props are dead and over the decades aircraft are becoming larger, 737-700 to 737-800, A319 to A320, etc. Small cities that cannot support a 65-76 seat RJ are being dropped. Years back there were the Beech-1900, Saab-A340, Dash-8, EMB-110, etc, they are all gone as the move is now to larger aircraft as it makes better use of flight crews, moving 65 people trumps moving 19 to 35 passengers. PSA is reducing its CRJ-200’s this year and AA’s E-140’s are not being painted the new livery.
The new normal is larger planes.
How about a modest increase in the maximum weight? A compromise that would allow some new RJ’s and yet keep the larger RJ’s as mainline like the E-195. The better an airline does in keeping costs down benefits all employees, mainline and regional.
This could be worked out with some give and take but that process seems so elusive today.
The interesting thing is Scope clause (39t MTOW, 76 seat) is viable / available today. Even proven technology is available. It’s just BBD were drowned in their CSeries adventure and E mis specified their smallest E2’s. Now it seem too late, to NEO the CRJ with GE. .
https://groups.google.com/group/aviation_innovation/attach/4c68005923123/CRJ-800%20Passport.jpg?part=0.2&view=1&authuser=0
The new engine does what apart from adding weight?
As well its designed for low cycle long range flights for business jets ( Global 7000) not high cycle short distance regional jets (CRJ)
Its like everything with business jets, they arent designed for heavy duty like airliners even though they may look like them.
For instance an airframe would be 25000 hrs not 65,000 and so on. Engines are designed for around 500 hrs use per YEAR . Think of them like racehorses not farm horses.