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Japan's Mitsubishi Heavy to freeze development of SpaceJet regional jet - sources

Credit: REUTERS/Maki Shiraki

Japan's Mitsubishi Heavy Industries Ltd plans to freeze development of its Spacejet regional jet as the coronavirus pandemic erodes its finances and that of the aerospace industry, two people with knowledge of the decision said on Thursday.

By Tim Kelly and Maki Shiraki

TOKYO, Oct 22 (Reuters) - Japan's Mitsubishi Heavy Industries Ltd 7011.T plans to freeze development of its Spacejet regional jet as the coronavirus pandemic erodes its finances and that of the aerospace industry, two people with knowledge of the decision said on Thursday.

One of the sources said the plan would be announced along with a medium-term business plan on Oct. 30. The sources declined to be identified because the plan is not yet public. Spokesmen at MHI declined to comment.

MHI had said in May that it would more than halve the annual development budget for the jet, developed by unit Mitsubishi Aircraft, in the most serious of numerous setbacks for a programme that had already been delayed six times.

Still, the company had said it remained committed to the project, which the Japanese government had promoted as a once-in-a-generation chance for the country to establish itself as a commercial passenger jet maker.

The pandemic has wreaked havoc on the aviation industry, among them Japan's biggest carrier, ANA Holdings Inc 9202.T, which was to be a launch customer for the SpaceJet with delivery that had been slated before the end of March 2022.

The plan to freeze development was first reported by Kyodo News.

(Writing by Chang-Ran Kim; Editing by Mark Potter and Emelia Sithole-Matarise)

((ran.kim@thomsonreuters.com; +81-3-4563-2740))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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