The Mitsubishi SpaceJet — as we know it today — is dead

From the perspective of its corporate parent, the SpaceJet was no longer a parallel strategy, so much as an increasingly uncomfortable perpendicular one.

Avatar photoJon Ostrower·
Industry Strategy
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Release Date
May 27, 2020
The Mitsubishi SpaceJet — as we know it today — is dead
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Mitsubishi Heavy Industries’ intent to cultivate a new market for the Japanese conglomerate in North America has been withdrawn. Its purpose, the creation of a next-generational regional jet, is on hold indefinitely. Mitsubishi Aircraft Corporation, or Mitac, MHI’s commercial aircraft unit, is now set to shutter its operations in North America and Europe, the company confirmed last Friday. With letting go of Mitac’s international presence, its parent has reabsorbed its aircraft division leaving an indefinitely-paused future for the existing M90.

Overnight at Komaki Airport in Nagoya, Mitac rolled out its first completed production aircraft in the early hours of May 28, but it isn’t expected to fly for quite some time.

It’s important to delineate between MHI, the program’s corporate parent, which builds everything from rockets and wings for 787s to industrial power systems and cruise ships and Mitac, which led the development of the Mitsubishi Regional Jet. That effort began in 2008 and was rebranded as SpaceJet in 2019 with a product to meet U.S. regional jet scope clause restrictions. That delineation is now key to understanding what is now unfolding and why, increasingly, it may guide the conglomerate back toward Boeing for its next big aerospace project.

Related: Mitsubishi moves its SpaceJet off the launch pad and into limbo

“We have had to make difficult decisions that will significantly reduce our global activities and will have a major impact on our organization,” a Mitac spokesman said in an emailed statement to The Air Current. “Due to the budget directives, Mitsubishi Aircraft will close its overseas locations and consolidate activities at its headquarters in Nagoya, Japan.” MHI on May 11 announced it would halve the budget for the SpaceJet program and write down more than a ¥263.3 billion ($2.45 billion) in program assets and 2019 development spending, handing the company its first loss in two decades.

Only a small team in Moses Lake, Wash. will be maintained to preserve the first four test aircraft in storage. Its recently-opened headquarters in Renton, Wash. will be closed along with other offices in Dallas, London and its newly-established engineering center in Québec.

A spokesman for the conglomerate confirmed that it will still complete its acquisition on June 1 of Bombardier’s CRJ program, and along with it, the aftermarket support (and resulting revenue) for the fleet of just over 1,500 Canadian regional jets still flying globally. While half of the budget of the SpaceJet is gone, the amount of spending will be effectively flat, the other half will end up paying for the $550 million acquisition of the sunsetting Canadian regional jet, which will become MHI RJ Aviation Group — distinctly separate from Mitac.

“The strength of [the] workforce from the CRJ program are core to the value of the business and strategic rationale for this transaction,” an MHI spokesman said in a statement to TAC.

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Jon Ostrower
Jon Ostrower is Editor-in-chief of The Air Current, where he leads coverage of the global aerospace and aviation industries. Prior to launching TAC in June 2018, Mr. Ostrower served as Aviation Editor for CNN Worldwide, guiding the network’s global coverage of the business and operations of aviation. Mr. Ostrower joined CNN in 2016 following four and a half years at the Wall Street Journal. Based first in Chicago and then in Washington, D.C., he covered Boeing, aviation safety, and the business of global aerospace. Before that, Mr. Ostrower was editor of FlightBlogger for Flightglobal and Flight International Magazine covering the development of the Boeing 787 Dreamliner and other new aircraft programs from 2007 to 2012. He is also an instructor at the University of Southern California in the Viterbi School of Engineering's Aviation Safety and Security program. Mr. Ostrower, a Boston native, graduated from The George Washington University’s School of Media and Public Affairs with a bachelor’s degree in Political Communication. He is based in Seattle.
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