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Mitsubishi and Mesa discuss possible SpaceJet deal

This week, Mitsubishi Aircraft Corp. saw a boost in sales of its long-running local SpaceJet aircraft when Mesa Air Group Inc. reached an agreement to discuss a possible 100-plane contract.

The Memorandum of Understanding, signed on Thursday, calls for Mitsubishi and Mesa to discuss terms for a firm order of 50 more SpaceJet M100 aircraft with purchasing options. In a statement from a regional airline conference in Nashville, Tennessee, the firms said shipments would begin in 2024.

Phoenix-based Mesa’s potential order will give the SpaceJet a more significant toehold in the U.S. market. Mitsubishi redesigned the aircraft in June and said it would begin deliveries in 2020.

Mitsubishi Heavy Industries Ltd. unit said deliveries of the SpaceJet M100 to Mesa, which can accommodate approximately 70 passengers, would begin in 2024. It is said that the contract is worth around 400 billion yen ($3.74 billion).

Since the project started, Mitsubishi Aircraft has received around 400 SpaceJet orders but has not seen any new orders since 2016 due to repeated delays in the planned delivery date of the company. The delays were the result of changes to the design, designed to meet the high demand for jets of about 70 seats on the primary North American market.

The aircraft, initially called the Mitsubishi Regional Jet, was renamed in June, and the developer also reviewed the SpaceJet M100 design to provide more flexible seat configuration and more passenger space.

Mitsubishi Aircraft said it is still currently negotiating to sell 15 of its SpaceJet M100 with another North American company. The SpaceJet M90, which can seat about 90 people, is its other version.

In most U.S. pilot contracts, the SpaceJet M100 is small enough to satisfy the definition of “range provision,” which restricts the aircraft length that regional airlines can fly to major carriers. For American Airlines Group Inc. and United Airlines Holdings Inc., Mesa operates 145 regional jets. Mitsubishi Aircraft, part of Mitsubishi Heavy Industries Ltd., has suffered multiple failures in its $2 billion aircraft production as it reworked significant weight loss aspects. Availability has been delayed several times to release customer ANA Holdings Inc. and is now expected next year.

Mesa is likely to consider buying SpaceJets as Canadian aircraft manufacturer Bombardier Inc. will stop producing the jets it will use next year.

Mitsubishi claims the aircraft can burn 20 per cent less fuel per trip than existing regional jets of the same size due to Pratt & Whitney, a subsidiary of United Technologies Corp., new geared turbofan engines. In June, Mitsubishi decided to purchase $550 million and nearly $200 million in assets from Bombardier Inc.’s CRJ regional jet program.

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