Ascend by Cirium senior consultant Max Kingsley-Jones reviews the development of the intermediate regional jet sector and impact of the SpaceJet pause
The decision by Mitsubishi Aircraft to “pause” development of the SpaceJet has unsurprisingly led to speculation about the future of the much-delayed regional jet family. But if the status of the programme does move from limbo to defunct, this could have a long-term impact on the supply-side dynamics in the intermediate regional jet (70-90-seat) space and the wider sector below the mainline market.
The market in which Mitsubishi pitched the SpaceJet (called MRJ at launch in 2007), has been through many iterations and players over the last few decades. As things now stand, Embraer is well placed to have the market to itself should the SpaceJet not be revived.
Until Canadair (later Bombardier) heralded the advent of the 50-seat jet in 1992 with the original CRJ100, regional jets were effectively the lower end of the jet sector. The market had been fought out during the 1980s and early 1990s between British Aerospace (BAe) and Fokker with their 146/RJ and 70/100 families, respectively.
The aircraft landscape that exists today was shaped three decades ago as various OEMs – both existing and new entrants – jostled to position themselves for the replacement market and growth. During 1996-1999, the European regional OEM scene was in turmoil as Fokker folded while BAe tried to forge a partnership with ATR to create the clumsily named “Aero International (Regional)” or AI(R).
The Airjet family of a 70-seater with a 58-seater to follow failed to launch, and ensuing demise of AI(R), left the way open for the recently created Fairchild Dornier and its new family of 50-110-seat jets, baselined on the 70-85-seat “728JET” (later “728”). With solid backing by Lufthansa and Swiss regional Crossair, this clean-sheet design with five-abreast cabin configuration and GE Aviation CF34-8 power was launched in 1998.
While this was playing out, Bombardier moved to capitalise on the runaway success of the CRJ100/200 with a 70-seat major derivative. Launched as the CRJ700 in 1997, this was in fact the first of the new 70-seaters making its first flight in 1999.
Watching in the wings was Embraer whose initial 70-seater plans emerged in 1997 based around a stretched EMB-145. However it quickly became apparent it needed a more holistic approach. Its plans crystallised around a 70-110-seat four-abreast family dubbed “ERJ-170” and “ERJ-190” using versions of the same CF34-8 engines on the 728. This little powerplant would become the cornerstone of the first generation of large regional jets.
The green light shone at the 1999 Paris air show, with Embraer flipping original 728 customer Crossair to place the launch order for 60 and 100 options. The family subsequently became known as E-Jets.
Fairchild Dornier’s early move was not enough to guarantee success, and shortly after the 728’s glitzy roll-out event in March 2002, the cash-strapped company filed for insolvency. Launch customer Lufthansa eventually signed for E-Jets.
With Bombardier having expanded its offering with the 90-seat CRJ900 (and 100-seat CRJ1000 launched in 2007) and Embraer’s all-new family well established, the size and shape of the intermediate regional jet market was set fair. Since the first CRJ700 was introduced in 2002, Bombardier and Embraer have between them delivered almost 1,700 aircraft into the sector – with shipments averaging over 70 aircraft annually during the last 10 years.
When Mitsubishi decided to challenge this duopoly in March 2008 with the launch of its 70-90-seat MRJ concept backed by launch customer ANA, service-entry was envisaged for 2013. The all-new design, powered by advanced Pratt & Whitney geared turbofans (the PW1200G GTF), looked impressive from a technical perspective. Its powerplant was set to create major disruption in both the regional jet and single-aisle sectors in the years that followed.
There were of course the usual question marks over a new entrant’s ability to deliver the required level of global support and despatch reliability, but this did not prevent the MRJ racking up key US orders from SkyWest and Trans States.
Spurred on by the success of Airbus and Boeing with their re-engined single-aisles, Embraer decided to follow the derivative approach, launching its updated E-Jet E2 family in 2013 powered by the GTF. Deliveries of these new variants began with the 97-seat E190-E2 in April 2018, followed by the 120-seat E195-E2 in September 2019.
The third variant, the E175-E2, is a couple of seat rows longer than the 76-seat E175 from which it evolved and flew in December 2019. But that increase in capacity has so far blunted sales due to current scope clause restrictions in the key US market.
These clauses currently cap the regional airlines serving American Airlines, Delta Air Lines and United Airlines at 76 seats and a maximum take-off weight of 86,000lb (39t). Neither the E175-E2 nor MRJ90 met the MTOW limit and hoped for relaxations have failed to materialise.
Meanwhile, the MRJ had experienced a series of delays and redesigns, pushing back first flight until November 2015, by which time deliveries were back to 2018 amid further development troubles. Further slippages meant that by the 2019 Paris air show certification was not expected until 2020. Firm orders stood at 213 aircraft, but hopes that US customers would switch to a smaller 70-seater MRJ70 version proved elusive.
During the show, Mitsubishi Aircraft revealed a programme reboot under the “SpaceJet” branding, and the larger M90 was joined by a revamped smaller variant, the scope-clause friendly M100 at 76 seats for delivery from 2024.
But the SpaceJet programme soon suffered a major blow when Trans States cancelled its order for 50 M90s (plus 50 options) citing that the 88-seat variant did not meet US market requirements. The orderbook for the M90 included 15 for launch operator ANA, 32 for JAL and 100 for SkyWest, albeit deferred, with Aerolease recently cancelling its 10.
Mitsubishi’s decision in 2019 to acquire the CRJ programme from Bombardier amid its “sunset” phase was mainly about securing a turnkey global support network for the SpaceJet. But in May 2020, it suspended SpaceJet M100 development, followed in October by the decision to “pause” the baseline M90 variant.
“We will work to review where we stand, make improvements, and assess a possible programme restart,” said Mitsubishi.
The latest Cirium Fleet Forecast projects almost 2,200 deliveries worth over $57 billion in the intermediate RJ category globally over the next 20 years. The forecast assumes US scope clauses will be addressed and expects 62% of deliveries will be to North American operators.
As it stands the only firm programme, the E175-E2 is stalled with an empty orderbook while the SpaceJet at best faces an uncertain future. History does not paint a happy picture for airliner programmes that have been stopped and then restarted. But if the SpaceJet is not revived and demand in the 70-90-seat regional jet sector reaches the forecast level, then it will surely prompt a reaction or risk the market being left entirely to Embraer.
Changes to US scope clauses are therefore crucial to “uncork” demand in the key US market for larger intermediate regional jets like the M90 and E175-E2, which are effectively in limbo awaiting a relaxation – the E175-E2 is delayed to at least 2023. This means the scope-compliant E175-E1 continues in production (132 were on order at 1 January 2021), and deliveries are projected for at least another five years.
However, the current crisis may well prompt renegotiations around the scope clauses and open the market to the E175-E2 and possibly enable a restart for the M90.
Max Kingsley-Jones is senior consultant with Ascend by Cirium