Japan’s Passenger Jet Project in Trouble After $4.9 Billion Loss
Coronavirus adds to woes of Mitsubishi Aircraft’s SpaceJet, already delayed six times
Mitsubishi Aircraft Corp. reported an annual loss of $4.9 billion, the latest distress signal in a turbulent decadelong quest to build Japan’s first passenger jet.
Mitsubishi is seeking to build and sell a 90-seat model it calls the SpaceJet, the most recent iteration of an aircraft that made its maiden test flight in 2015 but has been dogged by technical and design problems. Deliveries to customers have been pushed back six times.
The current version of the plane has yet to be certified by aviation authorities as ready for commercial use and faces new headwinds from the impact of the new coronavirus on the travel industry.
Mitsubishi Heavy Industries Ltd., the parent company of Mitsubishi Aircraft, bought Bombardier Inc.’s regional jet business last year. Since then, Mitsubishi Aircraft has made a series of changes to its executive suite.
In June, the company eliminated the position of chief development officer, a role with wide control over the project. It had been held by Alex Bellamy, a British engineer who brought in foreign staff with experience in building commercial aircraft to an almost exclusively Japanese team.
Project development is now led by newly appointed chief engineer Yasuhiko Kawaguchi, formerly deputy head of the company’s test site in Moses Lake, Washington.
Mitsubishi Heavy has also said the aircraft manufacturer would close overseas facilities and make staff cuts as it consolidates operations in Nagoya, central Japan.
On Wednesday, Mitsubishi Aircraft said its debt exceeded its assets by ¥465 billion ($4.3 billion) as of the end of its financial year March 31, after a ¥526 billion ($4.9 billion) loss in the year. It booked impairment losses on the SpaceJet project, writing down almost all of the assets the company had reported a year earlier.
A company spokesman didn’t respond to a request for comment.