May 23 (Reuters) – SpaceJet regional aircraft maker,
Mitsubishi Aircraft, said it is closing overseas operations that
employ hundreds of people and may cut staff at home after its
parent company slashed the development budget for Japan’s first
commercial aircraft in a century.

The move, which comes as the coronavirus pandemic wreaks
havoc on the aviation industry, casts doubt over the future of
Japan’s commercial aircraft ambitions and will at the very least
delay certification of Mitsubishi’s first plane, the M90.

Mitsubishi Aircraft has already shelved plans for a shorter
variant, the M100, seen as key to winning orders in the
lucrative U.S. market.

“The company has had to make difficult decisions that will
significantly reduce its global activities and will have a major
impact on its entire organisation,” a spokesman told Reuters.
“We do anticipate a reduction to our organisation in Japan, but
is not entirely clear yet,” he added.

Closures will include offices in Washington State and
Montreal, Canada, with Mitsubishi Aircraft keeping a small team
of engineers to carry out aircraft maintenance at its test site
in Moses Lake, a three hour drive from Seattle, the company
said.

The aircraft maker’s parent, Mitsubishi Heavy Industries’
(MHI) cut the aircraft unit’s budget this year by more
than half to 60 billion yen ($558 million) due to the
coronavirus downturn.

This is the latest and most serious setback yet for an
aircraft programme that has already been delayed six times. The
first Mitsubishi regional jet was supposed to go into operation
in 2013, but will not be delivered to launch customer ANA
Holdings until after March next year.

MHI, which is purchasing Bombardier Inc’s regional
jet business, has so far remained committed to a project that
Japan’s government has promoted as a once in a generation chance
for the country to establish itself as a commercial passenger
jet maker.

In the year ended March 31, MHI reported a 29.3 billion yen
operating loss after swallowing a 263 billion yen charge from
Mitsubishi Aircraft.
($1 = 107.6100 yen)
(Reporting by Tim Kelly, Maki Shiraki and Kanishka Singh;
Editing by)