Japanese industrial giant Mitsubishi is restructuring its SpaceJet program amid the COVID-19 pandemic and global aviation industry changes.

As a result of parent company Mitsubishi Heavy Industries slashing Mitsubishi Aircraft Corporations budget by more than half to over JPY 60 billion (USD $560 million) for the fiscal year of 2020 in May, the aircraft group will reduce its overseas offices and slash its workforce of 2000 by more than half.

While closing down offices in the US, Europe, and Canada, Mitsubishi will maintain a minimal presence at the US test facility at Moses Lake, Washington State, for the storage and maintenance of the already built test aircraft.

Along with the staff and budget reductions, Mitsubishi also announced recent changes to the program management. It has been reported in news outlets such as the Japan Times that current Chief Development Officer Alex Bellamy will step down from his post at the end of the month. Mitsubishi announced that Yasuhiko Kawaguchi – who currently is the deputy head of testing of Mitsubishi's US test site – will take the helm of Executive Chief Engineer.

Among the biggest contributing factors to the reduction of its budget was the COVID-19 pandemic and losses due the the acquisition of Bombardier's CRJ program which Mitsubishi recently completed the purchase earlier in June.

First introduced as the Mitsubishi Regional Jet (MRJ) in 2008, the regional jet concept is the first Japanese entry to the global commercial aircraft market since the NAMC YS-11 built during the 1960s and 1970s. In 2019, the MRJ was rebranded as the SpaceJet and Mitsubishi Aircraft has marketed two variants: the M90 and the M100. Both offer passenger capacities of less than 100 passengers, with the M100 more marketed to US-based regional carriers.

With All Nippon Airways (ANA) and Japan Airlines (JAL) as project launch customers, Mitsubishi has also secured orders for 200 of the jets from airlines from other parts of the world including US-based Mesa Airlines and SkyWest.

The Nagoya, Japan-based venture has been incurring heavy financial losses and project delays over the years. It recently reported a USD $275 million loss for the fiscal year 2019.

Despite the challenges, Mitsubishi Aircraft stated it is still committed to the project which will focus on the M90 variant as it undergoes testing for certification. The company said in a statement: “In order to contribute to the development of the aviation industry in Japan and to develop Japan's first commercial jet, Mitsubishi Aircraft will focus on certification and will continue to move forward.”

Related Content

Indonesia AirAsia X to Cease Scheduled Operations in January

Safest Airlines of 2019

Air Asia X Increases Flights to Hawaii