Employees sit at the Mitsubishi Regional Jet booth during the opening day of the Singapore Airshow at Changi Exhibition Center February 16, 2016. Mitsubishi Aircraft Corp, a unit of Mitsubishi Heavy Industries Ltd, has struck a deal to supply 20 regional jets to U.S. leasing firm Aerolease, its first agreement with a lessor.EDGAR SU/Reuters
Mitsubishi Aircraft Corp., the maker of Japan's first passenger jet, and propeller-plane maker ATR announced orders from lessors at the Singapore Airshow amid concern that a two-year, multibillion-dollar order spree could soon start losing steam.
Mitsubishi Aircraft signed a letter of intent with U.S. lessor Aerolease Aviation LLC for 10 planes on a firm basis, with an option to purchase 10 more, the companies said in a statement Tuesday. The cost for 20 planes would be $946-million (U.S.) in list prices, before customary discounts. ATR said it won a $130-million order from Singapore-based lessor Avation Plc.
The orders on the first day of the Singapore Airshow come amid speculation that the heyday of multibillion orders from India and Southeast Asian countries is ending, and that airlines in the region could have to delay delivery of planes as economic growth slows.
The new contract gives a boost to the Mitsubishi Regional Jet, which had its first flight in November, after it announced delivery would be delayed a year to the middle of 2018. The company had 407 orders for its new aircraft, including options and purchase rights, as of the end of last year.
With Asia set to become the world's biggest aircraft market over the next two decades, Japan is trying break the regional-jet duopoly of Brazil's Embraer SA and Canada's Bombardier Inc. Mitsubishi Aircraft is getting a boost as Bombardier focuses on building its larger C Series jets, which will be able to carry as many as 160 passengers, rather than renew its lineup of planes with under 100 seats.
Over the 20 years to 2034, airlines will need about 6,350 jets that seat 70 to 130 passengers, according to forecasts from Embraer. The Brazilian company is upgrading its jets with new engines to take advantage of rising travel demand and compete with the MRJ.
Japan's first new passenger plane in more than 50 years has passed tests for normal use. The plane's frame is currently being strengthened amid concern it wouldn't pass certification tests that judge whether the frame can withstand 150 per cent of normal use, the company said in December.
The two biggest customers for the MRJ are SkyWest Inc. and Trans States Airlines Inc. in North America. Domestically, Mitsubishi Aircraft has won orders from ANA Holdings Inc. and Japan Airlines Co., the nation's biggest carriers.
Mitsubishi is making two versions of the MRJ, which can seat from 78 to 92 passengers. The 92-seat MRJ90 has a list price of $47.3 million, according to the company.