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Mitsubishi Aircraft Plans Europe Push, Faces Embraer

Hideo Egawa, president of Mitsubishi Aircraft Corp.
Hideo Egawa, president of Mitsubishi Aircraft Corp., poses with a model of the company's Mitsubishi Regional Jet (MRJ) during an interview in Tokyo. Photographer: Akio Kon/Bloomberg

June 28 (Bloomberg) -- Mitsubishi Aircraft Corp., the maker of Japan’s first passenger jet, said it expects 30 percent of orders for the plane to come from Europe as it challenges Bombardier Inc. and Empresa Brasileira de Aeronautica SA.

“We have a good feeling about Europe,” Hideo Egawa, president of the Mitsubishi Heavy Industries Ltd. unit, said in an interview in Tokyo on June 25. “A lot of airlines have shown an interest there.”

The planemaker, which has as many as 125 orders so far for its Mitsubishi Regional Jet, plans to open a sales office in Europe as early as this year and is considering building a 100-seat version of the aircraft to win customers in the region. Chinese and Russian planemakers are also challenging Embraer and Bombardier with regional jets as part of plans to create globally competitive aerospace industries.

“Mitsubishi is late to the market and so has a handicap compared with Bombardier and Embraer,” said Yasuhiro Matsumoto, an analyst in Tokyo at Shinsei Securities Co. “There can’t be any delays if they want to grab market share.”

ANA Order

Production of the first MRJ is due to begin later this year. All Nippon Airways Co., which has ordered 25 planes, including 10 options, is due to receive the first one in 2014. The first overseas customer, Trans States Holdings placed an order for 100 jets, including 50 options, last year.

Mitsubishi Heavy fell 0.6 percent to 315 yen as of the close of trading in Tokyo today.

Mitsubishi Aircraft is making 78- and 92-seater versions of the MRJ. The aircraft can fly as far as 3,410 kilometers (2,119 miles), enabling it to reach anywhere in the mainland U.S. from Chicago.

The planemaker aims to sell 1,000 regional jets over 20 years, Egawa said. The company estimates global demand for more than 5,000 planes fitted with 70 to 90 seats in that period.

The MRJ will be powered by engines from United Technologies Corp.’s Pratt & Whitney, which will help make the plane 20 percent more fuel efficient than regional jets currently flying, according to Mitsubishi Aircraft. This will be a key selling point, Egawa said.

“European airlines have big hopes for new planes that can limit carbon-dioxide emissions and noise pollution,” he said.

Russian military-plane maker Sukhoi Co. plans to deliver its first SuperJet regional aircraft later this year. The company has orders for 122 planes. Commercial Aircraft Corp. of China’s 70-seat ARJ 21 should enter service late this year or early next year, the planemaker said in February. General Electric Co.’s leasing arm is among customers for the plane.

Embraer builds the E-Jet family of planes, which sit 70 to 122 passengers. European customers include regional units of Alitalia SpA, British Airways Plc and Deutsche Lufthansa AG. Customers for Bombardier CRJ planes include SAS Scandinavian Airlines and Lufthansa.

To contact the reporters on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net; Kiyotaka Matsuda in Tokyo at kmatsuda@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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