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Friday, March 28, 2008

ANA gives Mitsubishi lift with plane order

MHI now expected to green-light production of first domestic jetliner


Staff writer

All Nippon Airways Co. said Thursday it plans to order up to 25 small passenger jets from Mitsubishi Heavy Industries Ltd., becoming the leadoff buyer of what would be Japan's first domestically developed jetliner.

On the strength of ANA's commitment, MHI was expected to officially announce Friday its decision to produce the jet, which it says would be the quietest, lightest and most fuel-efficient in its class.

ANA, Japan's second-largest carrier, said it decided at a board meeting on the day to introduce the Mitsubishi Regional Jet into its fleet if the project goes ahead.

ANA will place a "firm order" for 15 planes, with an option for a further 10.

"As an airline, we would like (MHI) to speedily reflect our needs and work together so they can produce jetliners that we can be proud of and sell well in the world," Akira Okada, ANA's senior vice president in charge of corporate planning, told a news conference.

ANA will jointly develop the MRJ, which will seat between 86 and 96 passengers. The company is aiming for the jets to go into service in 2013, provided production gets the final go-ahead, Okada said.

The order from ANA is expected to help MHI absorb development costs for the jet.

By the same token, ANA is counting on the MRJ to meet its demand for more economical jets for its domestic routes than its existing Boeing 737-500 aircraft.

"We can secure more trust, efficiency and comfort than existing small jets or propeller planes by introducing the MRJ," Okada said.

Thanks to its energy-saving turbofan engine, designed by U.S.-based Pratt & Whitney, and the use of lightweight carbon fiber composite materials, ANA said the MRJ will be about 40 percent more fuel efficient than the Boeing 737.

ANA expects adding the MRJ to its fleet will improve profits by ¥5 billion a year, Okada said.

Meanwhile, Japan Airlines, which is reportedly considering buying MRJs, said later in the day that it has not made any decisions yet.

While the MRJ could play an important role in expanding JAL's network ahead of the expansion of Haneda airport in 2010, the carrier said in a statement that it was still studying the plane.

The MRJ would be the first Japan-made passenger plane since the YS-11 turboprop, which debuted in 1962 and ended production in 1973. MHI and other aerospace firms supply parts to U.S. maker Boeing Co. and Airbus SAS of Europe.

MHI has been pushing the project as the global market for small aircraft with fewer than 100 seats is expected to grow in the future.

MHI anticipates orders from a number of airlines, including Japan Airlines Corp. and overseas carriers.

A Nikkei business daily report said last week that MHI may sign its first overseas deal with Vietnam Airlines Corp. as early as next month with a 20-plane order.

But global competition is expected to be harsh, with the market for small jets dominated by Canada's Bombardier Inc. and Brazil's Empresa Brasileira de Aeronautica SA, better known as Embraer. Russian and Chinese manufacturers are also planning to debut regional jets a few years ahead of the MRJ.

MHI said the same day it is considering outsourcing overseas product support, including maintenance and repairs, of the MRJ to Swedish aviation group Saab if it proceeds.



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