Analysis: Mitsubishi suspends development of M100, continues M90 due to COVID

By Scott Hamilton

Analysis

May 12, 2020, © Leeham News: Mitsubishi Heavy Industries (MHI) yesterday said it cut development money for the M100 SpaceJet. M100 R&D is suspended indefinitely while it continues for the M90 on half rations.

MHI will continue certification of the M90.

MHI also said it will reevaluate demand for the M100 because of COVID-19 impacts.

This immediately raised questions whether MHI may kill the M100 program.

To do so will squander MHI’s once-in-a-lifetime chance to become a real global power in commercial aviation. If this happens, “Japan Inc.” also loses a chance to be part of this.

Entry into service

Entry-into-service of the M100 is planned for 2024. EIS for the M90 is planned for 2021.

M90 Space Jet. Source: Leeham News.

The M90, previously known as the MRJ90, EIS has been delayed six or seven times as development encountered typical new-design challenges. But inexperience in designing an entire civil airplane (as opposed to components) and civil air regulations compliance required significant redesign of the MRJ90. This added substantially to the EIS timeline.

Too heavy for Scope

The MRJ90 was also too heavy to comply with US pilot contract Scope Clause limits, a miscalculation. MHI and its subsidiary, Mitsubishi Aircraft Corp. (MITAC), was not alone. Embraer miscalculated as well with the competing E175-E2. This is also too heavy for current Scope. Embraer and MITAC believed Scope would be relaxed this year.

Scope is unlikely to be relaxed for years to come.

MITAC developed the M100, a smaller version based on the MRJ90, that complies with Scope. Design changes in the M100 were applied to the MRJ90, creating what MITAC called a “certifiable” airplane. This was named the M90. There were 900 design changes.

Entering the RJ business

Mitsubishi is a Tier 1 commercial airplane supplier and has been for decades. Its partnership with Boeing runs deep. MHI is a major industrial partner on the 787. While not without difficulties, this partnership provided valuable experience.

MHI’s foray into commercial airplane development goes back decades. When regional jets were 40-50 seat versions, the company surveyed airlines about what they wanted in RJs.

As RJs grew, so did MHI’s concept—into the MRJ90 and smaller MRJ70.

But being a Tier 1 designer and producer is far different than becoming a full-fledged airplane designer. Although MHI produced military aircraft (pretty much as a licensee), civil air regulations are an entirely different arena. In addition to miscalculating about Scope, inexperience caused MITAC to miss critical redundancy requirements and misplace critical components or systems that subjected them to critical failures.

Certification

The MRJ90 was not an airplane that could be certified by authorities. Furthermore, Japan’s regulator hadn’t certified a home-grown commercial airliner since the YS-11 in the early 1960s. Meticulous in the ways of Japanese culture, certification process was excruciating slow and detailed.

The international kerfuffle over the certification of the Boeing 737 MAX also gave the Japanese authorities pause. They did not want to repeat the shortcomings of the Federal Aviation Administration even by accident.

These factors and the redesigns added to the delays that today are 7-8 years long.

Redesigning the jet

Redesigning the MRJ into a Scope-compliant, certifiable airplane was a bold step and costly step. It was necessary to continue the commercial aviation program.

The M100 is fully compliant with Scope as it now exists and is likely to exist for the better part of this decade. The cabin was redesigned for maximum flexibility to meet any configuration requirements by airlines. Economics were improved over the MRJ90 by double-digits. According to LNA’s analysis, the M100 has competitive economics with the E175-E2 and a significant economic advantage compared with the E175-E1.

Airlines and lessors like the redesign. MITAC has MOUs for 495 M100s, nearly double the peak orders for the MRJ90. Several hundred more orders were expected this year before COVID upended everything. A formal program launch was needed from MHI to convert these MOUs into firm orders.

What does it mean?

MHI’s decision to halve R&D spending is in line with moves by Airbus, Boeing and Embraer to cut costs.

Suspending development on the M100 also mirrors the other OEMs. New airplane development at all three companies is suspended. Boeing continues spending on design and production R&D, but the amount is unknown outside the company.

MHI’s decision to continue M90 certification progress makes sense. MITAC and the Japanese regulators need to finish its agonizingly slow process. Doing so will position both for a speedier certification of the M100, assuming MHI eventually greenlights the program.

But suspending development of the M100, instead of slowing it, is a mistake.

Demand will recover. It’s a matter of when. The developing consensus is that it will take 3-5 years to return to 2019 traffic levels.

Slow recovery

Regional jet demand will be slower to recover than mainline jets. Legacy airlines worldwide are likely to use their own jets with their own pilots and flight attendants to resume service before tapping regional partners. In the US, the Scope restrictions also include a ratio of regional jets and partners to mainline service.

Geographies with vast expanses and poor alternatives require regional jet service. Unlike Europe, Japan and areas of China where bullet trains exist, there are few alternatives other than driving in the US, Canada, Australia, Latin America and Africa. Nor are there alternatives in island-prevalent regions in Asia-Pacific.

Mitsubishi’s unique opportunity

MHI faces a once-in-a-lifetime opportunity to become a global player in commercial aviation. With the withdrawal of Bombardier from the scene, MHI and Embraer are the only Western suppliers of regional aircraft. China and Russia currently have home-grown solutions, none of which are commercially viable elsewhere.

China’s ambition to become a global player is well known. And it can do so, given time. Japan Inc., led by MHI, can meet this challenge. Or it can squander this challenge.

Embraer’s weakened for the moment by the failure of the Boeing joint venture. Its product line is not as strong as its public relations suggests. The E175-E2 is a US-designed airplane with no orders. The E175-E1 design will be 25 years old in 2024—and its engine dates to 1982, ancient technology. The M100 beats it on every metric.

Going forward

MHI should not suspend M100 development. Slowing it while simultaneously reassessing demand and timing makes sense. The MITAC leadership that conceived SpaceJet should be encouraged to bring it to life.

The Bombardier CJR program was purchased to give SpaceJet an instant global product support network. Killing the SpaceJet really makes the purchase superfluous. The deal is to close June 1. MHI already announced it will write off the entire $550m purchase price. Essentially, this “zero-based” budget maneuver means profits can be reported right away. But the CRJ will be a thing of the past in 20 years. Without the SpaceJet, what new business opportunities does MHI see?

Developing an M200 95-seater and potentially an M300 110-seater in 2030 can lay the foundation to become a major global player.

Or MHI and Japan Inc. can be resolved to being a supplier to Airbus, Boeing, Embraer and China (politics notwithstanding).

It all depends on how visionary MHI, the leader, wants to be.

60 Comments on “Analysis: Mitsubishi suspends development of M100, continues M90 due to COVID

    • Yes it is . The earlier MRJ70 was within the scope max weight and reasonable range. But airlines now wanted a 3 class 76 seat cabin up from 2 class. Economy plus seating needed more space
      The fundamental difference is the E series is a double bubble fuselage with under floor baggage. The SJ/MRJ series was like the CRJ and other regional jets/props with a single circular shape and baggage on main deck, the result is a lighter structure

      • The PW1200 engine is significantly heavier than CF34-8. The weight advantage due to the single circular shape is eaten by the engine weight. According to Wikipedia data, the M100 has 42000 kg of MTOW and 1900 nm range, while the E175 has MTOW of 40370 kg and 2200 range. So I am failing to see where the M100 is more efficient. Are there any empty weight estimates comparison?

        • @Max: The PW1200 is indeed heavier than the GE CF34 but by saying E175 Plus I assume you mean the E2 version, right? Isn’t that engine on the Plus same on the M-Series? It is, I believe. So the single bubble does give the latter an advantage.

          • Hi Assad, no is the E1 version with the Wing Tip extension that current flies in US. It has the CF34-8, and has 6% better fuel burn than original 175E1 with winglet.

      • I wouldn’t be so sure on that.
        What is the magic that would bring the M90 42ton down to the scoped 39ton?
        Taking out one or two fuselage slices? Changing the winglet?
        The M100 wings and engines are not tailored to it. The M90 PW GTFs are bulky for the M100 size. All these “derivative-ish” issues easily eat up the benefits of using high-end engines. Not to mention that Embraer has decades of experience in transonic aerodynamics design, whilst Mitsubishi has not proven yet how many drag counts they can squeeze.
        Looking to the numbers, I question if the M100 will ever be Scope compliant or even if the M100 would beat so hard the E175E1 (with the aero cleanup done in 2016) as the author believes.

        • @Richard H

          The M100 is sized smaller than the MRJ90, so what you are suggesting is essentially what’s been done dimensionally. But there are other technical changes, too. There were more than 900 design changes from the MRJ90 to the M100 (and the M90), including materials changes and weight reductions. The cargo bay was reduced in size and the overhead bins upsized. The M100 was designed to be Scope compliant in all configurations used by the majors today. LNA analyzed the specifications of the MRJ90, M90 and M100 vs all the relevant EJets with its proprietary Aircraft Performance Model to come to its economic conclusions.

          • @Scott Hamilton,
            How accurate are the LNA models? How credible are the MITAC published data?

            There was is not a single MRJ operating. Anybody can write anything on a paper.

            One thing is reasonable to agree: it is veeeeeery hard to eliminate 3 tons of an aircraft keeping virtually the same dimensions and basic materials (assuming that the M90 is really a 42 ton MTOW plane). Again, it is not TCed yet.

          • @Richard: LNA’s model has been validated over and over and over again. Since you are not a paying client for Leeham Co., you don’t get to see the proof.

    • This makes absolutely no sense. The M90 has no future. It’s not a “sellable” aircraft in the US, which is the biggest RJ market. If they don’t go ahead with the M100 and variants, then why even bother certify the M90?

      • It makes sense – MITAC centers on an aircraft that will bring more revenue in forseable future. US under-scope market if rotten for now, so they change direction of development. And will back to M100 in a due time.

        • Centers on what? The M90? There’s no future in the M90 outside Japan. Even there it probably won’t be operational due to all the restrictions. Why continue to throw money into a black hole? To save face? I agree, it makes no sense. If they do stretch out the M100 program, it would make sense for them to first develop a robust business and marketing strategy based on lessons learnt from M90

  1. ‘[RJ] demand will be slower to recover than [that for] mainline jets. Legacy airlines … are likely to use their own jets … to resume service before tapping regional partners.’ Embraer’s John Slattery in webinar remarks last week argued that — post-Covid-19 — carriers would want to restrict capacity in order to enhance yields with emphasis on trip cost – but he would say that…

  2. This would very much be a sad development if it continues. Mitsubishi has taken the steps such as buying CRJ support to become a global player, they could partner with Boeing easily since Boeing engineers likely know the space jet by heart after certification help. Could not agree more, now is the time to pounce on opportunity to become dominant. So much wasted potential and missed opportunities not to continue now.

    • Boeing never gave design ‘help’ to Mitsubishi, their deal was for after market support/ spares computer system etc
      Actually even within Japan Mitsubishi was the wrong manufacturer to lead on this sort of project, its expertise was fast jets. Kawasaki was the designer on the recent military projects such as the C-2 cargo lifter and the P-1 maritime ( with is very similar in size to the 737 based P-8). While no one had commercial certification experience

  3. The MRJ70 was the proposed scope compliant version , not the MRJ90. The MRJ90 was designed for the non US market

    it even says so her
    https://leehamnews.com/2019/06/13/how-mitsubishi-aircraft-morphed-the-mrj70-into-the-m100-spacejet/
    “The MRJ70 carried fewer passengers in its design than needed: 69 vs 76 in the typical US configuration, a major economic disadvantage.
    The MRJ70 was light enough to have an adequate range when operating under the 86,000lb Scope limit, even with the new Pratt & Whitney 56-inch GTF engines. And it had the same cross-section as the E175, so boarding and seating comfort were fine. But its cabin was too short. .
    the E175-E2 had both heavier engines AND a longer cabin – for the modern 3 class cabin

  4. Scott, possibly some dumb questions: since the 90 is above scope and was modified in the 100 to comply with scope, with many of the changes then back-designed into the 90, but the 90 still not certified, could they instead leapfrog over the 90 and direct all efforts into the 100? Are there barriers to doing that which would make it untenable?

    Do you think they are till holding onto hope of a scope change? Also since that change would help Embraer as well as MHI, would the massive downturn in business climate motivate the pilot union to allow a one-time exception to scope for these two specific aircraft? I get the motivation for pilots to maintain scope, but could they help their junior pilots and the regional industry which supports the mainline industry, by adjusting for this particular circumstance?

    It seems like the existing scope is more supportable in a healthy business environment, but perhaps less so in the current environment. But I haven’t seen that view expressed anywhere. Thanks for your patience.

    • See above. the MRJ90 was for non US operations ( 90 was nominal seating) and was for early deliveries to Japanese customers and has been the version undergoing certification.
      The MRJ70 which was within scope weight and had suitable range was to be modified (later) to be the SJ100

    • @Rob: There are two views to consider. One is to drop the effort and spend on the M90 and go straight to the M100.

      Another is to proceed sequentially do the M90 and then the M100.

      With no COVID, going in parallel has the argument of getting certification done in advance of the M100. It also allows kinks to be worked out in production before the M100.

      • Thanks Scott. I understand better now, from Duke’s response as well, that the 90 and 100 have somewhat different markets, so it may be that choosing one or the other reduces some portion of market share. I thought at first that the 100 was simply a future upgrade of the 90.

        From the existing orders (which may not mean much now), it appeared that US airlines still ordered the majority of 90’s. Not sure if they intended to operate out of scope with full load or in scope with reduced load, or perhaps would convert those orders to 100’s when available.

        • It would make sense to see the US buyers – Trans State/Compass and Skywest- original orders as placeholders. Placing bets which ever Scope went
          The original MRJ90 was seen as a 86 to 96 seater , way out of scope and the MRJ70 as 70-80 seats
          Trans State has folded , but that was planned just before Covid, ironically as they had difficulty getting pilots.
          Embraer had around 550 built of its E190, which is slightly bigger at 100 seats, and flies with JetBlue

          • What Duke is refusing to accept (acualy twisting around) is that both Embraer and MHI gambled on the scope going away. Ergo, ALL they offerings focused on the over scope aircraft (MH70 was dropped though it would have been under scope)

            So no, the 90 was not intended solely for world market. It was US market without or adjusted scope and the world as well, but the US is by far the biggest market.

          • Duke – what Transworld might not be accommodating is that E & M likely are not be alone in having hoped/anticipated/speculated that Scope conditions might by now have evolved. Was there not support for that possibility – or did both OEMs go ahead in the face of well stated ‘knowledge’ and advice from industry experts to the contrary?

          • This stood out for me, regarding the much lower crewing costs of the regionals

            “Subsequently, it requires a larger aircraft at the mainline level before the seat costs match or beat the regional aircraft. ”

            Which is what happened, the 130-145 seater mainline is replaced by the 170-180 seater
            And also
            “entire fleet of small narrow-body aircraft were deemed uneconomical until new technology aircraft such as the C Series could overcome the pilot cost difference. ”

            In my view the newvtech moving down to the regional level with the lower crewing costs could lead to a boom in those orders

          • Duke, these are good points. The author felt the negotiation landscape in 2020 would be:

            Airline Desire: Low
            Price of Relaxation: High
            Perceived Pilot Threat: Medium

            Do you think the COVID crisis may change that landscape now? The article shows how 9/11 changed it entirely by 2011, with loss of pilot negotiating power.

            It would seem that pilots will hold the line as long as they can, so maybe depends on how quickly things recover.

            Also seems like the boundary of around 90-100 seats makes the most sense logistically, but maybe not economically for pilots. I can see how the decisions at MHI and Embraer might have been made, however poorly they may have turned out.

          • Great publication! Thank you for this. Seems like the new wave of bankruptcies will almost certainly change the current scope limits in the next 5 years, by either allowing heavier, but still limited to 76 pax aircraft. Or by increasing these allowed regional jets numbers.

  5. @Scott

    >Embraer and MITAC believed Scope would be relaxed this year.

    A fundamental question is what made both Embraer and MHI believe that? Were there negotiations underway years ago that would indicate this was going to happen? Or did they just believe if they build the aircraft it would have to change?

    These were multi billion dollar bets and as far as I can tell based on nothing much.

    • The MRJ70 was within scope, as it was seen back in 2008. The goalposts moved and economy plus meant a slightly longer fuselage was required. The early design review raised the fuselage hieght slightly to allow bigger overhead lockers, which has now paid off to have a better carry on luggage capacity that Embraer can only dream of.

    • Maybe they are told by the three majors that it would be relaxed.

      • As Rob’s link showed….back in around 2000 the scope seat limit was at 50 seats…

  6. Without seeing the actual wording from Mitsubishi it is unclear to me what is actually happening. So,did they actually say “suspend” and, if they did, did that mean what it is taken to mean here? Far to easy to misunderstand translations. All I’ve seen are partial quotes that seem to take specific words – eg reconsider – out of specific context.

    Even if they choose to supend, as in fully halt, zero budget, the M100, is this really a bad thing? After all, until a model (90 or 100) is certified there can be no revenue and the 90 is, I assume, closest to achieving that.

  7. Are there any good articles explaining why scope clause matters for aircraft purchasing? I have a rudimentary understanding that airlines have agreements with pilot unions to prevent them from contracting out with ununionized regional aircraft purchases, but that’s it.

    • Perhaps you are looking for more detail, but Wikipedia has an article on scope clause that explains briefly the effect on airlines and manufacturers, giving examples and including references to source material.

      In a nutshell, the scope clause limits airlines as to how many regional aircraft they can operate in a certain size range, and over certain routes. That in turn governs the regional aircraft purchasing decisions.

    • @Burk: Scope is a jobs protection labor contract provision for mainline pilots.

      • Within that are passenger and weight (MTOW) limits

        Ergo, 76 pax and 86,000 pounds.

        Its an AND type legal clause so it has to be under BOTH or its in violation.

        Delta by going with the A220-200/300 (109 and 130 passengers) then is viable as Delta not a hired out to contractor aircrat (part of Delta and a full Delta Pilot/Co Pilot) and makes money.

        Delta has been using various MD and Boeing 717 aircraft in that role successfully for some time.

  8. Is MHI missing a golden opportunity or are they starting to look at getting out of this debacle completely ?

    The old saying that if you want to loose money build aircraft or boats applies.

    Japan is not a low cost production market. While a 787 type might be viable, a regional jet? Nope, it will always loose money.

    You might note that its Mitsubishi HEAVY Industry. The only reason they make military aircraft at all is that the government is willing to pay 3x via licensee production of what it would cost to buy it form the US (which are already out of sight costly) . Jobs and ego to hold their place in the sun program.

    Currently the losses are covered up by being under the defense arm or MHI.

    Like the 787, it is not only not going to make money its a loss of what has been spent.

    You want to break into a market, then come up with a 737 replacement.

    And then its a 20 years gamble.

    • Mitsubishi Nainenki was established in 1920 in Nagoya to build aircraft and their engines. They are still building aircraft there. There was another company on the other side of the city who are still there too, named Toyota.
      In 1934, the renamed Mitsubishi Kokukai ( Aircraft) was merged with Mitsubishi Shipbuilding to form Mitsubishi Heavy Industries.
      I dont think they are going to leave the aircraft business. Even Boeing has a pause on some development in current circumstances

      • You missed the part bout government contract and price is no object as well as licensed for someone else built.

        When there is a endless pit that never has any chance of getting filled back up let alone return a profit, then sooner or latter it gets shut down.

        • Kawasaki C2 and P1 arent licensed production. Mitsubishi X-2 Shinshin a prototype fast jet isnt licensed either
          Japan sees well into the future for its next industrial moves , doesnt have to worry about Wall St and quarterly numbers.
          I doubt they have even spent what Boeing has lost on the KC-46 project.
          I see too many people looking at this project as though it was an american company, forgetting about all the massive amounts sunk into technology stocks with no prospect of a return soon . Amazon ran for decades without making much money, and by accident finding a new niche cloud computing. Uber has spent $20 bill with no return and their asset is an app.
          You can always tell US based posters, hyper critical of other countries but a poor understanding of their own countries economic structure and its ‘bottomless pits’

          • You again missed the point.

            Its a Japanese government contract that has price as no object.

            Miltar programs and civialin program are not the same.

            Just ask Airbus how well they did on the A400 (which was a civilian Airbus not EADS defense program in a military environment )

            Other than Bernoili the two have nothing in common.

            The MRJ jets has been and continues to be a complete mess and a forever loss.

            Building the CRJ program gives them a basis of support and sales but it does nothing to development and produion which they simply are not capable of doing.

            There is no future for a big firm in regional and its a struggle going into failure now for a small agile one like Embraer (who drank the we are not going to have to live with scope cool-aid)

  9. The development cost of this airplane is so completely out of control that it will never come close to breaking even. It is going to cost at least 4-5 times what any of the Bombardier CRJs cost to develop. And after it is certified, being new and an orphan operators will insist on massive discounts, so they won`t be likely to recover their recurring costs, forget about their development costs. Nobody has been selling significant numbers of smaller airplanes for quite some time. People speculate that there might be a demand post covid, but that is a totat pie in the sky guess and none of it was built into the business plan.
    The commenter that said that maybe MHI is just looking for a way out of this debacle is probably closest to the truth. The parent company has started losing money overall. If there is a shakeup at the top and the new CEO is pressed to restore profitability the aircraft branch will be the first on the chopping block. Prestige programs are nice, but when the chips are down sanity will return. I think the claim that MHI will squander a chance to become a global power is absolutely laughable. They are more likely squander a chance to join the long line of companies that have tried and spectacularly failed to make money building airplanes. Not sure what he is smoking but I want some.

    • Reporting is that Japan and MHI both viewed the M90 as a loss leader, not necessarily expecting to make money but hoping to establish a new industry, based on experience over many years of manufacturing aircraft components for others.

      Costs and losses were already spiraling due to major certification issues, but the new economic issues may force their hand on the entire endeavor. If so, that is a shame and loss, I think Scott discussed this all correctly in the article.

      • Its only a loss leader if you have a plan to do so.

        They not only did not, they set themselves up for failure in multiples.

        They deliberately steered away from Boeing and the LCA single aisle segment.

        That segment is the only one they could hope to succeed commercially in, and they had a golden opportunity with the 737 mess (failure to replace it, the MAX added grossly to the losses but not the sole issue)

        Of course they would have to establish a US mfg presence to make it work.

        Airbus itself has said the US is the best in the world combination of good infrastructure and lower cost mfg.

        Like the A380, the MHJ was based on pie in the sky wishful thinking.

  10. Not sure if that is a good or bad decision.

    As far as I see, regional planes will be in low demand the next years, even more than A & Bs lager planes. We’ll see a few airlines not surviving the next few months or years, might be tight for a lot of them in August / September.

    So let’s assume an average scenario, CoV2 vaccination available end 2020, economy and traffic normalizing in 2021, continuing the long term growth path in 2022, when do you expect demand for regional jets comes back?
    I’d say 2022 on, maybe. With oil that cheap, you can fly your old CRJ or E1 jets for a while.
    I guess out of a sudden, there’s time for Mitsubishi to get it right and not follow Bombadiers path into nonbeing.

    • In US regionals have much lower crew costs, and you make more money with a full RJ rather than a 50% full 180 seater.

      • In some sense, the restart may mimic the development of air travel over the last several decades, only in an accelerated time frame, with many of the pieces already on the board, and much better technology available.

        It may be some time before traffic rebounds enough to support all the direct routes that were coming into existence. Hop routing may be more economical at first, in which case regionals could play a larger role in feeding NB and eventually WB mainlines.

        But mainlines also may look to their own NB fleets to use first as well. It will be interesting to see how all the economics evolve again.

        • Duke:

          The regionals are bottom feeders getting cut clashed and chopped by the big boys.

          You play by the big boys rules or you are out.

          There is no money being made in regional. All your existence and ops is based on contracts with the big boys.

          Cape Air is one of the few sort of regional successes, they fly prop jobs!

          Ravn in AK just went belly up.

        • Rob , checked back on Courtney Miller of Emery -Riddle University who you linked to on the Scope story.
          Found another of his very good articles , this time an analysis of the Delta and the 717 and how they made it work. Very interesting for people who like to read well informed opinion ( as opposed to the other kind)
          https://www.linkedin.com/pulse/vision-717-how-delta-turned-jet-nobody-wanted-strategic-miller

          One of his points is the 88 B717 fleet allowed Delta to use 70 MORE large regional jets

          • Thanks Duke. I wonder if this is a model for how other airlines may utilize the A220. It’s interesting that they were able to reduce regional operations with a mainline jet. The point about the market needing to grow into the smaller aircraft, to make them viable, is well-taken. Very viable now.

          • It is a good article.

            Missing the point though is that the regionals are not owned nor flown by Delta (or any other large carrier)

            They are contractors. Until you get to a viable sized jet its a cut throat market.

            In the case of the A220 its a huge win as it can replace 717, MD various, 737-700 and A320-319 with one family (and bigger when the -500 comes out)

            The 777 shutdown is just the first part of the cuts.

            Embraer is at a dead end with their lineup. Even the 170-E1 is not going to sell with the crash. With low fuel prices you have to jump to an A220 size to be viable. Be interesting if Delta slows down those as well.

          • Whether they are owned doesn’t matter, it’s the numbers available , not the operator.
            The interesting thing is if the airlines will still be choosing frequency over capacity for many routes. With some states reopening too early a second wave is practically inevitable, which will hobble aviation for longer. And who from other countries will travel there when health insurance for travellers have pandemic exclusions. Many countries with universal type health system have reprocicity with similar type countries to cover unexpected events. US isn’t included.

          • Duke… – remind me, please; what were the ‘… 70 large regional jets made available as a result of the 717’s arrival’? Evidently, they enabled/provided the 50-(?), 65-, and 76-seat stepping stones, yes?
            Unfortunately Courtney credits us all with more familiarity with history.

          • Yes, I think that’s right. The arrival of the 88 B717’s was applied 40% to mainline routes and 45% to regional routes. The 45% allowed reduction of roughly 2 50-seaters for each B717, and increased the availability of 70 larger regional aircraft that had also previously serviced the 45% routes.

            As you mentioned, Delta then utilized that availability by growing and upsizing the regional markets to match the larger jets. As the markets shifted upwards, they also more effectively filled the B717’s, which were right-sized as the next step up from the 70 larger regional jets.

            Overall the effect was a growth of both market and aircraft capacity, that then were vey well aligned and profitable.

          • Yes it does matter who owns the aircraft.

            Its called profit margin. There simply is not the margin in regional as there is in the LCA area.

            That discounts the scale of numbers. Vastly more 737 and A320 types than regional. That is why Boeing has got away with it, on a large scale they (until now) overcame their screw up with scale of mass.

            All the regionals are is sub contractors, the Airlines negotiate the aircraft buy, then set the rates and the sub contractors tries to make some money when in fact they are stuck with a single client.

            Embraer was low enough cost as was BBD to work in that arena.

            BBD /CRJ is gone (hmm tell you something).?

            Embraer is in serious trouble (tell you something)?

            MHI will see how long they like loosing money. The are now a low cost producers. They will always loose money even if they get a jet into service which they have not in (15 years now)

            Program was started in 2005 after a 2003 false start and is Government supported, otherwise it would never have sen the light of day.

            Once again its in reset. Stay tuned.

    • Sash – the idea of ‘lager planes’ is kinda appealing; no doubt a few sharp-witted readers can suggest which carriers (by name) would be most suited to fly such.
      If the kites need a name, we might start with Stratotankard…

      • Sash:

        At best wide spread vaccine and Her Immunity acquired by the summer of 2021.

        US unemployment is now at its worst since the Depression of the late 1920s.

        Normal is going to be a whole different thing.

        Look at recovery from any crash, what 6 years before we got back the crash of 2008? And that was with marginal paid workers who were scraping along so have no fall back.

        While they keep saying this is not a financial crash, it is.

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