With passenger traffic drying up because of COVID-19 and not expected to reach pre-pandemic levels until 2023, Mitsubishi Heavy Industries (MHI) has decided to put its ambitious SpaceJet program, Japan’s first commercial aircraft in more than half a century, on hold.
It may be recalled that the company was forced to suspend test flights in the US because of the coronavirus pandemic. The decision to halt the program will result in a 50% decrease in staff strength in the company’s commercial aviation sector. The company will also reduce annual costs by 120 billion yen (US$1.15 billion) with the move.
The SpaceJet was originally scheduled to launch in 2013, but due to design and technical problems, the company had had to alter its schedule six times so far. Japan’s ANA holdings had ordered 23 of the SpaceJets but is now looking to reduce its fleet by 10% instead. MHI is aware that the demand for new aircraft will not return to pre-pandemic levels until 2025.
“We will work to review where we stand, make improvements and assess possible program restart,” the company said in its business plan for its regional jet. MHI has posted a 62.5% decline in second-quarter operating profit to 12.7 billion yen, while it expects a 50 billion yen ($478 million) operating profit.
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