Delayed Expectation

At least the MRJ is flying, with four aircraft already at the company’s Moses Lake Flight Test Centre in Washington State, U.S., though even getting them there didn’t go to plan. The first test flight to the U.S. from Nagoya last August was forced to turn back to Japan after just an hour in the air because of a problem with the air-conditioning system. It took two more attempts before the first plane made it across the Pacific. 

The same can’t be said for the COMAC C919, China’s 158-seat narrow-body. Launched in 2008, it began to miss schedule targets as early as the supplier selection and contracting stage. Originally supposed to take flight in June 2014, that was later re-scheduled to the second quarter of 2015 with first deliveries in late 2016. It didn’t happen. COMAC is now saying first flight should be sometime before the middle of this year and first delivery won’t be until 2020 at the earliest. On the bright side, if the current schedule for first flight, certification and delivery holds, it will still be six years better than COMAC’s first aircraft, the smaller ARJ21 (the -700 with 78-90 seats and the -900 with 98-105 seats). It ended up nine years behind schedule, with the first aircraft being delivered to Chengdu Airlines in November, 2015. Development of the C919 began in 2008. It is described as being China’s first domestically developed civil trunk line aircraft that is produced in accordance with the latest international standards. 

Of course it should be pointed out that delivery delays have almost become par for the course when it comes to producing new commercial aircraft. The complexity and technology involved in building today’s jets has tripped up even Boeing and Airbus, both of which have suffered from issues on the production line with their latest offerings such as the Airbus A350 and A320neo and the Boeing B787. In January, Embraer also said it was pushing back the entry into service of its new E175 E2 jet, which can seat as many as 88 people, to 2021, from 2020. But for the newcomers it is a more serious issue. They have yet to build a reputation for efficiency and reliability and the repeated push back of delivery schedules doesn’t exactly install confidence in existing or potential customers.     

To date, the MRJ has received 243 firm orders and 204 options from the likes of launch customer All Nippon Airways, Japan Airlines, Eastern Air Lines Group, U.S.-based Skywest, Trans States Holdings and Myanmar-based Air Mandalay. The MRJ, with its distinctive pointed nose, competes with Bombardier’s CSeries and Embraer’s E-jet family in the less-than-100-seats market. It is powered by Pratt & Whitney PW1200 geared turbofan engines and is available in either the 90-seat MRJ90 or 70-seat MRJ70 models. It is Japan’s first locally-produced commercial passenger aircraft since the country stopped making the YS-11 in 1974.

So far, customers are being pragmatic about the delays. ANA said it is “disappointed” but will continue to support the development of the jet as its launch customer. The carrier will maintain its order of 25 planes, including options, it said. Utah-based SkyWest, which has placed an order for 200 planes including options, said its firm orders “remain unchanged” and are dependent on flying contracts and scope availability. Missouri-based Trans States Airlines, with 100 MRJs on order, said it was “disappointed” by the additional delay.

In the meantime, MHI has pulled out the big stick, shaking up management in an attempt to get the program back on track. It started at the top, with MAC president Hiromichi Morimoto, who has been the planemakers top executive since April 2015, retiring on March 31. MHI has installed two of its executives at the top of the leadership structure of its subsidiary. Hisakazu Mizutani, previously president and chief executive of MHI’s Integrated Defense & Space Systems business, took over as president. In addition, Yuichi Shinohara, an MHI senior vice-president who holds the title of deputy head of business strategy and senior general manager and vice president of Commercial Aviation & Transportation Systems, became MAC’s chief executive. And if that wasn’t enough to let staff at the planemaking subsidiary know there will be a stricter hand on the tiller, MAC vice-president and general manager-sales and marketing, Yugo Fukuhara, said during a conference call after the latest delay was announced that MHI would be “more involved in the MRJ business” going forward. At a news conference, MHI president Shunichi Miyanaga also said he believed the management reshuffle will encourage Mitsubishi Aircraft employees “to work even harder”. The changes at the top are hardly surprising, considering that, separately, the parent company incurred a consolidated net loss of nearly A$129.5 million for April-December last year, compared with the year-before profit of A$616.4 million. It blamed the dismal results mainly on the MRJ development and commercial shipbuilding operations.

The reshuffle will encourage Mitsubishi Aircraft employees “to work even harder”.

Beefing up management isn’t the only step Mitsubishi has taken. Back in 2015 it opened an engineering centre in Seattle’s Georgetown neighbourhood with a staff of 150. It is now boosting the number of engineers there by more than a third as it steps up flight tests to meet its new deadlines. Fukuhara said in an interview in Tokyo the company wanted to make sure it had good coordination with its flight tests at Moses Lake and engineering in Seattle and Nagoya. The company was tapping local talent for its Seattle centre because the area offered a lot of people who have previously worked for Boeing, he added.

Mitsubishi is trying to put the best face it can on the latest delay. “The change is due to revisions of certain systems and electrical configurations on the aircraft to meet the latest requirements for certification,” it said in a statement. The latest program timetable says type certification is now schedule for 2019. “MHI is focused on supplying a comfortable, reliable, high-performance passenger aircraft with the world-class safety and operational support services. MHI is committed to the development and delivery of the MRJ with world-class performance and compatibility with the latest industry certifications,” it said. The company said the design changes would not affect aircraft performance, fuel consumption, or functionality of systems.

“We will continue with the ongoing flight test program with current test aircraft configuration and obtain certification flight test data of performance, flight characteristics for type certificate. The design change will not affect aircraft structure and we have already completed static structure test with ultimate load (150 per cent load) successfully.” With such a heavy bias in its order book towards U.S. airline customers, getting that certification is absolutely critical. 

But quite apart from the turbulence it is facing on the development front there are other issues that will be excercising the minds of Mitsubishi’s top executives. They involve the arrival on the world stage of U.S. President Donald Trump. MAC has probably already lost one potentially significant order, putting on hold a plan to sell aircraft to the Teheran-based Iran Aseman Airlines amid concern over American policy regarding the Islamic Republic under Trump. Word was released by Aseman Airlines deputy for planning and fleet expansion, Mohammad Gorji, in January. “Recently, the Japanese company (Mitsubishi), in a statement, called for suspension of negotiations until the policy of the U.S. government becomes clear… The Japanese are cautious in this regard, given their close ties with the United States,” he said. Apparently Iran was considering a deal worth A$650 million to purchase 25 MRJs.

Also of concern is that, despite the technical problems that have repeatedly delayed its planned delivery, more than half of the firm orders for the MRJ have been placed by American airlines. As an article in the February issue of Sentaku, a Japanese monthly magazine covering political, social and economic scenes, pointed out: If the “Buy American” policy Trump emphasised in his inaugural address were to be extended to the airline industry, the future of MRJ sales in the U.S. market — on which relies the fate of the aviation industry that is emerging around Nagoya — may be in jeopardy. There may be demand that MRJs sold to U.S. airlines should be built in the U.S. That may serve a blow to the Japanese civil aircraft industry, which has hoped to become a new engine of industrial growth.

Meanwhile, in China, COMAC does appear to finally be edging towards getting its plane off the ground. According to officials the C919 has now completed most of its ground-based pre-flight evaluations. Completion of onboard systems as well as major static and system integration tests are nearing finalization. “We have tested the whole aircraft, its key components and connecting parts,” said Li Qiang, an expert at the Design and Research Center of COMAC. With over 150 seats and a standard range of 4,075 kilometers, the jet is expected to compete with Airbus’ A320 and Boeing’s B737, which currently dominate the market. By the end of 2016, 21 customers had placed orders and options for some 566 C919 aircraft, and COMAC expects to sell at least 2,000. However, to date nearly all the orders are from Chinese airlines and leasing companies, the notable exception being U.S. lessor GECAS, which has ordered 10, no doubt with the intention of leasing them to Chinese customers.

The big question, of course, is whether the C919 has any chance of being a genuine competitor to its Boeing and Airbus counterparts. Critics suggest that not only will it be a technologically inferior product to its rival’s products but it won’t be available until well after the latest advanced versions of the A320 and B737 are flying with airlines, as indeed the A320neo already is. Chinese officials have sprung to its defence. Hong Jiansheng, deputy chief engineer of Chengdu Aircraft Industry Group, which designed and manufactured the aircraft’s nose section, has said development of the plane is progressing nicely and its delivery delays have nothing to do with its technological capability. Compared to its competitors, the nose of the C919 is more advanced, its windshield and cockpit layout are in line with market demand, and all the most advanced equipment is being used, claimed Hong. “Core technology cannot be bought with money; we must rely on ourselves,” he added. 

The C919 has been the centre of a lot of hype but as the delays piled up COMAC has been keeping a lower profile. Sources close to the program say the company is “proceeding extremely cautiously” with the first aircraft, deliberately checking everything to ensure that there are no safety issues. It is a critical development because China has identified the development of a mature aerospace industry as a key to economic growth and given it top priority. COMAC executives and Chinese government officials are concerned about the impact of the delays on the image of the C919 and the country. Any missteps would add up to disaster.

Any missteps would add up to disaster.

For both Mitsubishi and COMAC the travails along their journey to delivering competitive aircraft into the global market can be summed up in one word, according to industry insiders. That word is inexperience. Neither has previously produced a commercial passenger jet of the size to compete in the single-aisle and regional jet markets. In the case of the C919 some major alterations were made mid-journey. For example, at one stage COMAC switched the material for the center wing box, the structural heart of the aircraft, from carbon-fiber composite to aluminum. Industry sources at the time said the change was made because the manufacturer saw too much risk in building the composite part and that it would cost too much. It decided to develop aluminum alternatives to composite parts. And even though both the Chinese and Japanese firms have hired expertise from American and European aerospace companies to help with the program, they have had to work in an alien environment and under severe bureaucratic systems far different from conditions in Seattle and Toulouse. 

For COMAC, once it gets that first flight underway, the task will be to gain certification from the Civil Aviation Administration of China (CAAC), allowing the C919 to enter into service in the domestic market. A tougher proposition will be seeking U.S. Federal Aviation Administration certification, something that will be critical to improve the aircraft’s standing in the international market and appeal to customers outside China. But for both COMAC and Mitsubishi the jury remains out, not only on their potential commercial success but also whether or not there will be more delays.