Mitsubishi Heavy Industries Ltd. could pull the plug on its ambitious project to build Japan’s first domestically manufactured passenger jet.
The company is considering sharply scaling back staff and shrink budget related to development of the jet. The freeze comes amid slump in demand caused by the COVID-19 pandemic, sources close to the matter told Mainichi.
The new passenger jet, if successfully launched, would be the first commercial aircraft manufactured in Japan since the YS-11 turboprop plane built by Nihon Aircraft Manufacturing Corp., a public-private company, half a century ago.
In a statement Friday, Mitsubishi said "various possibilities" are being considered but no decision has been made. It will announce its stance on October 30 when its medium-term strategy is unveiled.
The regional jet project was launched in in 2008 and the maiden flight took place in November 2015.
The company’s subsidiary, Mitsubishi Aircraft Corp., had been working on a small regional aircraft called the Mitsubishi SpaceJet (previously, Mitsubishi Regional Jet).
Taking a beating on the economic front owing to the virus, the firm halved SpaceJet budget to ¥60 billion for the year ending next March. The firm has poured $9.6 billion into development.
When the project was launched several years ago, the company expected first SpaceJet delivery for 2013. Changes in design, review of the manufacturing process and a delay in parts delivery pushed the delivery date to mid-2020. In May, Mitsubishi said delivery of the first plane will be delayed until FY2021 or later.