Mitsubishi Heavy Industries (MHI) will further trim the budget of its troubled SpaceJet programme and “temporarily pause” most related activities, as it mulls a “possible programme restart”.

Releasing its medium-term business plan for its 2021-23 fiscal years, MHI adds that it will, however, still carry on with type certification documentation efforts. Japan’s 2021 fiscal year commences on 1 April that year. 


Source: AirTeamImages

Mitsubishi’s SpaceJet programme faces an uncertain future amid further budget cuts.

What will be paused will be activities relating to the development of the baseline, 90-seat M90 variant, MHI states.

“We will work to review where we stand, make improvements, and assess a possible programme restart,” the company adds.

It notes that while the coronavirus outbreak, which has significantly impacted the SpaceJet programme, is “temporarily depressing [the] market”, it is hopeful that long-term demand will return.

In its latest business plan, MHI says it will continue to minimise costs relating to the regional jet programme. To this end, the group will “shift investment away from SpaceJet” into other areas of new growth, such as mobility and logistics.

Already dealt a budget cut of 50% early this year, the SpaceJet programme will now see a further reduction in capital allocation from FY2021, with MHI allocating only Y20 billion ($192 million).

This is a far cry from the group’s allocated budget of around Y370 billion in its previous business plan for FY2018.

MHI’s latest comments also ends weeks of speculation over the fate of the SpaceJet programme, which has been plagued by delays.

A week ago, Japanese media, quoting sources within MHI, reported that the programme will be radically scaled back, effectively freezing it amid the global aviation slowdown.

MHI later dismissed the reports, adding that it was “continuing a detailed review” of the programme schedule, and will be “moving forward with development with an appropriate budget that takes into consideration the challenging financial headwinds facing MHI Group”.

Earlier this year, MHI halved the SpaceJet budget to Y60 billion, a move in response to the coronavirus crisis that also saw all non-Japanese SpaceJet locations closed and development of its 76-seat M100 variant shelved.

While the SpaceJet programme confronts an uncertain future, MHI will expand other parts of its commercial aviation systems business.

Having acquired the CRJ programme from Bombardier earlier this year, MHI states that it will from FY2021 expand the MRO business area and “secure synergies” across various units under its commercial aviation systems division.

As for its aero structures business, MHI notes that recovery is expected from 2024 and that it will “increase production efficiency and drive forward new technology development to participate in future global aircraft programmes”.

However, in the interim, MHI says it will be halving its workforce in its commercial aviation business by 2022, as it embraces automation to reduce costs. It gave no further details.


In MHI’s half-yearly financial results, released on the same day, the SpaceJet programme continued to be loss-making.

For six months ended 30 September, the programme chalked up losses of more than Y82 billion, nearly six times the loss it incurred the same period last year.


Source: Mitsubishi Aircraft

For six months ended 30 September, the SpaceJet programme chalked up losses of more than Y82 billion

The aircraft, defence and space unit, in which the SpaceJet programme resides, made an operating loss of Y66 billion, reversing the Y13 billion profit it made the same period last year.

First-half SpaceJet development costs came in at Y30 billion, against a full-year forecast of Y60 billion, MHI discloses, while one-time charges such as goodwill impairment from the CRJ acquisition came in at Y50 billion, against a full-year forecast of Y60 billion.

Still, MHI notes that the impact of the pandemic eased since bottoming out in the three months ended 30 June, when it was hardest hit.

On a quarter-on-quarter basis, both order value and revenue more than doubled, to Y206 billion and Y336 billion respectively.

MHI is forecasting a full-year operating loss of Y95 billion for the unit, revising its earlier forecast of Y90 billion.