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Monday, April 7, 2008

MHI Launches MRJ with ANA, P&W

Mitsubishi Heavy Industries, Ltd. (MHI) officially launched the Mitsubishi Regional Jet (MRJ), a next-generation regional jetliner, on March 28 with a single customer – ANA, although reports indicate customers could include Japan Airlines and even Vietnam Airlines in exchange for some participation in the aircraft program. Production is set to start in 2009 with first flight in 2011.
At the same time, All Nippon Airlines (ANA) announced the acquisition of 15 aircraft and options for 10 more while Pratt & Whitney announced the launch of its Geared Turbo Fan program to exclusively power the new jet. Service entry is set for 2013 with All Nippon.
The Wall Street Journal reported that Japan Airlines sees it as a nationally significant project which would “contribute greatly to the development of Japan's aviation industry." Vietnam may take up to 20 aircraft, said the newspaper, which added that Vietnam wants to produce as much as 30 percent of the jet. The newspaper also cited a previous agreement with Pratt, calling for at least three customers, including at least one from outside Japan, before it will go beyond the $1 billion invested in the past 20 years which promises to yield a 12 percent improvement in fuel burn. Even so, Pratt issued a press release indicated the ANA order also launched its geared turbofan program. The MRJ launch was precipitated by a government-imposed deadline of March 31 for its first order, said the Journal.
The newspaper also reported that the manufacturer is in discussions with International Lease Finance which helped launch Airbus when it ordered numerous jets and peppered them around the industry through leases. ILFC could order up to 100 jets. In a recent interview, ILFC founder and chief executive Steven Udvar-Hazy told the Journal the new jet was a “promising project" adding his company has been looking at the regional jet market very closely.

New Company Created
Beginning April 1, the tentatively named Mitsubishi Aircraft Corporation (MAC), a new company established by MHI to conduct MRJ business, will accelerate the MRJ's development and further strengthen sales activities to potential customers worldwide. MHI expects the new engine technology provided by Pratt & Whitney’s Geared Turbofan as well as new construction methods will make it more competitive than aircraft already in or being developed for the regional airline industry including current and future production Bombardier and Embraer Aircraft. It will also face competition from emerging programs from China – the ARJ21, which has been delayed – and the Sukhoi SSJs.
As Japan's first company to manufacture and market original passenger jetliners, Mitsubishi Aircraft will fulfill a long-cherished wish of the Japanese aircraft industry, leveraging technological expertise that MHI has built up through its aerospace business for its own aircraft programs. Japan has wanted to use its successful production methods in the automobile industry for a jet program but, according to the Journal, have watched Boeing and Airbus pioneer such methods in the aircraft industry.
Mitsubishi Aircraft will be responsible for various key activities in the MRJ project, including the jetliner's design, acquisition of type certification (T/C), procurement, sales and customer support. MHI's Nagoya Aerospace Systems Works will manufacture both the prototype aircraft and production models; it will also be in charge of the MRJ's flight testing.
Mitsubishi Aircraft was established as a wholly owned subsidiary of MHI capitalized at three billion yen (common stock and capital reserve), with plans calling for an increase up to 100 billion yen in line with business operations development. MHI plans to furnish roughly two-thirds of the requisite capital, and to secure the remaining equity investment it has approached companies including Toyota Motor Corporation, Mitsubishi Corporation, Mitsui & Co., Ltd., Sumitomo Corporation and the Development Bank of Japan. The Journal reported that Toyota is considering investing $100 million in the project in order to gain a 10 percent stake. Its main auto competitor, Honda, has already entered the industry with the production of its HondaJet Very Light Jet.
Mitsubishi Aircraft, headquartered in Nagoya, is to start with approximately 200 employees. Nobuo Toda, director and senior vice president at MHI, has been named its first president.
The goal for the aircraft is to apply advanced mainline jet technology as a standard for next-generation regional jet. The MRJ is a 70- to 90-seat class regional jet currently with cutting-edge technology that will enable dual achievement of top-class operational economy and outstanding cabin comfort. It will be the first regional jet to adopt composite materials for its wings and vertical fins on significant scale. In combination with new engines and an advanced aerodynamic design, the aircraft is being planned to reduce fuel consumption substantially and to contribute greatly to enhanced competitiveness and lower operating costs.
Since deciding on authorization to offer (ATO), MHI has been conducting full-scale marketing activities worldwide. MHI’s launch was enabled by securing cooperation from entities including trading houses and Nippon Export and Investment Insurance (NEXI).
Among the major partners in the MRJ program is Pratt & Whitney along with Parker Aerospace, to supply the aircraft's hydraulic system; Hamilton Sundstrand Corporation, furnishing various systems, including electrical power, air management and auxiliary power units; Rockwell Collins, providing the flight control computers and avionics; Nabtesco Corporation, to furnish the flight control actuators; and Sumitomo Precision Products Co., Ltd., supplying the landing gear.
MHI has been conducting research and development of the MRJ as a technology development project of the New Energy and Industrial Technology Development Organization (NEDO).
By incorporating today's most advanced design methods, elemental technologies, materials and processing methods enabled by leveraging the results of joint R&D activities with the Japan Aerospace Exploration Agency (JAXA), the MRJ will also provide cabin comfort while reducing environmental burdens.

ANA Opts for MRJ
The ANA Board of Directors selected the Mitsubishi Regional Jet (MRJ) as its new regional aircraft platform, placing a firm order for 15 and 10 options. The value of the deal was not disclosed by the aircraft will be priced at between $30 million and $40 million, according to the MHI’s announcement at last year’s Paris Air Show in which it said it was pursuing a regional jet.
The aircraft are part of the airline’s fleet rationalization program reducing aircraft types to three – large wide-body, medium wide-body and narrow-body. It currently operates 22 Bombardier turboprops including 19 DHC-8’s on domestic routes in Japan (14 Q400s and five Dash 8-300s. Eighteen are leased aircraft. In the medium to long term, ANA anticipates the need for a small jet in the 90- to 100-seat range.
Deliberations on the regional jet fleet began on January 16, with the establishment of a New Aircraft Selection Committee. The airline cited the larger capacity as fitting in between its turboprop and narrow-body fleets. It also said the aircraft will have greater reliability, economics and comfort than ANA’s present turboprops and narrow-body jet fleets as well as the flexibility to meet the mid- to long-term demand in the Japanese domestic market.
“We selected the MRJ, with its new technologies and advanced passenger cabin, as part of our drive to equip our fleet with the safest, most fuel efficient, environmentally friendly and passenger friendly aircraft available today,” said ANA President and CEO Mineo Yamamoto. “The MRJ will play an important role in our strategy going forward after the expansion of airport capacity in metropolitan Tokyo in 2010, allowing us to better meet the demands of our customers, the Japanese domestic market, the environment and the needs of our network.”
The increase in composites, coupled with Pratt & Whitney’s newly developed Geared Turbo Fan, the MRJ is expected to bring about a 40 percent saving in fuel, and increase revenue by an annual five billion yen, compared with 737-500 aircraft currently operated by ANA. In addition, it will produce fewer emissions and less noise than other regional aircraft of the same type, including turboprops, making it easier on the environment and on the passenger. (Report continues below)

Geared Turbofan
The Geared Turbofan is also slated for the yet-to-be-launched Bombardier CSeries. Both aircraft are scheduled to enter service in 2013. (For comments on the MRJ made by Bombardier see the Bombardier financial results story in this issue.)
"We are excited about this first order [from ANA] and it underscores what we've been hearing from our customers around the world – the Geared Turbofan engine brings the game-changing improvements in fuel burn, engine noise, environmental emissions and operating costs that airlines are demanding," said Todd Kallman, president, Pratt & Whitney Commercial Engines. "Customer reaction has been extremely positive. We currently have several proposals out with various airlines and we are confident that there will be additional orders throughout this year."
Since receiving authorization to offer the Mitsubishi Regional Jet in October 2007, Pratt & Whitney and MHI have visited more than 100 customers to discuss the benefits of this next-generation aircraft and the Geared Turbofan engine.
The Geared Turbofan engine builds on more than 20 years of development experience and more than $1 billion in technology investment. A full scale Geared Turbofan demonstrator engine has accumulated approximately 130 hours of ground testing and is preparing for flight testing later this year. This is in addition to the thousands of hours being accumulated on Pratt & Whitney's 15 technology rigs around the world, including the Fan Drive Gear System rig, which has simulated more than 40,000 flights on the Geared Turbofan's fan drive gear system.
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