NEW YORK — Development of a new airplane takes time. No one knows that better than Hideo Egawa, the chief executive of Mitsubishi Aircraft, who has had to tell buyers of the Mitsubishi Regional Jet, the company’s first commercial airplane since the 1960s, that take-off will be delayed.
“Development is difficult,” Mr. Egawa said in New York when asked why delivery of the jet to All Nippon Airways had been delayed twice. The first deliveries, initially planned for this year, are now scheduled for 2015.
The difficulties do not come from a lack of manufacturing experience. Over the years, Mitsubishi Heavy Industries, Mitsubishi Aircraft’s parent company, has produced components for McDonnell Douglas fighter planes and the Boeing 787 Dreamliner. The challenge, Mr. Egawa said, has been focusing such diverse expertise on “one plane.”
In seeking to introduce a smaller plane to fly between secondary cities, or between such cities and airports at major hubs, Mitsubishi Aircraft is joining a crowded field dominated by Boeing and Airbus and with smaller competitors on nearly every continent.
By the time the Mitsubishi Regional Jet flew for the first time, in April last year, Bombardier of Canada had about 2,500 jets and turboprop commuter planes in service around the world. The Brazilian aircraft maker Embraer, meanwhile, has 1,700 commercial jets in operation worldwide. The Sukhoi Superjet — a joint project of Sukhoi Civil Aircraft of Russia and the Italian company Alenia Aeronautica — has far fewer sales to its credit but is in use by airlines in Bermuda, Indonesia and Mexico, among others. Commercial Aircraft Corp. of China, meanwhile, is working on its ARJ21 aircraft, although that project also has been delayed.
The boom in regional jet production began 20 years ago as airlines sought to replace turboprop planes with longer-range, faster jets, typically with 50 passenger seats. To maximize the economic viability of the aircraft, they were often flown by subcontractors who paid pilots less than the airlines would. Carriers like Air Canada also used regional flights to feed passengers to its more-lucrative long-distance and international flights, said Calin Rovinescu, chief executive of the airline. “If you can get the right number of seats, it is a creative way to reduce your costs,” he said.
In the early 2000s, when the price of jet fuel rose sharply, the revenue from filling a 50-seat plane generally no longer covered the cost of the fuel burned to fly it. A more fuel-efficient regional jet — larger than a 50-seater but smaller than the smallest Boeing and Airbus airliners — was deemed a potential solution, but only if airlines could persuade their pilots to allow regional pilots to fly larger planes. The airlines wanted more seats on regional jets, said David Krieger, manager of economic and financial analysis at the Air Line Pilots Association in Washington. “Bigger is what they would rather see.”
Carriers agreed to restrict the number of larger planes they would fly and on what routes; in exchange, airline pilots accepted having regional airlines fly jets with more than 50 seats. More recent regional jets typically have between 70 and 100 seats.
“Labor agreements contributed to the design of the airplane,” said Chet R. Fuller, senior vice president at Bombardier Commercial Aircraft which manufactures five models of regional jet, including the 50-seat CRJ 100 and the 104-seat CRJ1000.
Even as the market has opened for larger regional jets, Mr. Fuller said, the potential for smaller planes has not faded. “Fifty-seat markets are still there, you just can’t economically serve them with the current airplane,” he said. With larger aircraft, airlines can often save money by reducing the number of flights on a particular route.
As carriers strive to fill every seat on all flights, regional aircraft of various sizes are being deployed on longer routes, said Nawal Taneja, an airline consultant and emeritus professor of aviation at Ohio State University. “If they can fly a lower-capacity airplane across the country 20 percent cheaper,” he said, an airline might be able to turn a profit on a route that is unprofitable when using a 250-seat airplane.
One example is Ethiopian Airlines, which uses wide-body Boeing aircraft including the Dreamliner for its 72 long- haul international routes but flies 13 Bombardier Q400 turboprops, which seat about 80 passengers, on shorter routes to expand its network in Africa.
“It doesn’t make sense for us to have a regional plan and deploy a 787 or a 777 or a 737,” said Hailu Teklehaimanot, a spokesman for the airline. “You need a smaller, narrow-body 100-seater, or less, to cater to that regional capacity with more frequency.”
Mr. Krieger of the Air Line Pilots Association said that figuring out what planes to buy, and where to fly them, required nuanced calculations. Carriers must take into account factors including fuel prices, passenger demand and labor restrictions.
“There is a very high ratio of fixed costs,” he said, adding that some airlines regretted the purchase of 50-seat jets. “They’re stuck with them. The market value is low over time,” he noted.
Mitsubishi thus finds itself entering a complicated and difficult market, and sales of its passenger jet have so far been limited to Japan and two U.S. companies, Trans States Airlines and SkyWest Airlines.
Even when a manufacturer thinks it understands what the market wants, unexpected developments can throw calculations out of joint. The lackluster European economy is just one example. “By no means are we interested only in Japan and America,” Mr. Egawa said. But, he added, “Europe’s economy is not recovering at a good pace and we are not seeing an intent to buy by the European airlines.”
Article source: http://www.nytimes.com/2013/06/17/business/global/for-airlines-savings-could-come-in-midsize-packages.html?partner=rss&emc=rss