Mitsubishi Halves SpaceJet Budget, Delivery in or after FY2021

Mitsubishi Heavy Industries (MHI) announced it will halve the budget for its SpaceJet project to ¥60 billion for the year ending next March, as the company takes a beating from the COVID-19 pandemic.

"We will proceed with the project at an appropriate scale while taking into account the difficult circumstances the group faces," Mitsubishi Heavy President and Chief Executive Officer Seiji Izumisawa told reporters Monday.

In its “FY2019 Financial Results & Emergency Measures, Strategy Update” report published on May 11, it Mitsubishi predicted delivery of the first midsize plane to be pushed by a year or more.

When the project was launched several years ago, the company expected first SpaceJet delivery for 2013. Changes in design, review of the manufacturing process and a delay in parts delivery pushed the delivery date to mid-2020.

“Profit from business activities declined significantly, resulting in a loss of ¥29.5 billion (down ¥216.2 billion YoY), mainly due to the loss in our SpaceJet business. Delivery of the first SpaceJet plane will be delayed until FY2021 or later,” MHI said in its report.

In addition, the Japanese company noted that the development work of a 70-seat SpaceJet, designed for the U.S. market will be suspended until further notice. The delivery of the jet was set to start around calendar 2023.

“Plans for the 70-seater will be reconsidered during the suspension,” Izumisawa said.

The final prototype for the 90-seater was just completed this January. The plane was to be flown to the United States for test flights, but the COVID-19 virus has caused a setback.