Asian plane makers brace for bumpy ride

Mitsubishi Aircraft Corporation's SpaceJet M90
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Updated 15 February 2020

Asian plane makers brace for bumpy ride

  • The Asia-Pacific region is the world’s biggest aviation market for commercial aircraft
  • Japanese and Chinese firms have embarked on programs to build their own planes

SINGAPORE: Asian plane makers have thrown huge sums at building jets but flagship projects have suffered repeated setbacks, and they face a tough time breaking into a market dominated by established players.

The Asia-Pacific region is the world’s biggest aviation market for commercial aircraft, and Japanese and Chinese firms have embarked on programs to build their own planes.

Asia’s two biggest economies are home to myriad companies making hi-tech goods, from cars to smartphones, which in many cases have succeeded in rivalling Western firms.

But when it comes to building planes — which requires huge investment, years of development, and rigorous safety standards — progress has been slow.

The companies at the forefront of the Asian drive, Japan’s Mitsubishi and Chinese state-owned manufacturer COMAC, have both seen their flagship projects delayed for years.

China “could be successful in 10-15 years but at this time, the odds are not really in their favor,” Shukor Yusof, founder of Malaysia-based aviation consultancy Endau Analytics, said.

“The international market is just too saturated with aircraft from the established manufacturers so there us very little space for new players.”

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$7.3bn

The SpaceJet M90 aircraft has cost an estimated 800 billion yen ($7.3 billion) to develop.

Asia’s biggest air show in Singapore this week was dominated by European plane maker Airbus, US manufacturer Boeing and a handful of smaller, mostly Western manufacturers.

Chinese manufacturers were forced to pull out because of a ban on travelers from China due to the coronavirus outbreak.

Mitsubishi Aircraft Corporation was showing off a mock-up of the interior of its SpaceJet, the first version of which was originally due for commercial rollout in 2013.

After repeated delays, Japanese carrier All Nippon Airways had finally been due to receive the first of the SpaceJet M90 aircraft in the middle of this year.

But the model suffered its sixth delay this month, with the first delivery now expected next year at the earliest. The setbacks, due mainly to technical glitches, have raised the development cost for the plane to an estimated 800 billion yen ($7.3 billion).

Steve Haro, vice president and head of global marketing and strategy at Mitsubishi Aircraft Corporation, said that more than 900 changes had made to the aircraft’s original design.

But he added that a milestone had been reached as the latest version was ready to be certified by regulators.

“We’re really at the place where we’re crossing the finish line of a long race,” he said.

The plane is for short, regional flights, and its main rival are aircraft made by Brazil’s Embraer, he said.

“We’re not interested in competing with Boeing on the large airplanes, or Airbus. We see ourselves meeting a vital market segment that has really been ignored too long,” added Haro.

Over 400 orders had already been received for the M90 from around the world, he said.

Meanwhile, state-owned Commercial Aircraft Corporation of China (COMAC)’s flagship jet has been delayed at least five years, and analysts believe it is likely to miss its 2021 schedule for the plane’s first delivery to a customer.

The single-aisle C919 is designed to compete with the Boeing 737 and Airbus A320, the favored workhorse of budget carriers. The manufacturer says there are 815 of the planes on order.


Saudi minister: OPEC+ will take responsible approach to virus

Updated 26 min 22 sec ago

Saudi minister: OPEC+ will take responsible approach to virus

  • Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter

RIYADH: Saudi Arabia’s energy minister said on Tuesday he was confident that OPEC and its partner oil-producing nations, the so-called OPEC+ group, would respond responsibly to the spread of the coronavirus.

He also said Saudi Arabia and Russia would continue to engage regarding oil policy.

“Everything serious requires being attended to,” the minister, Prince Abdul Aziz bin Salman, told reporters at an industry conference in Riyadh.

An OPEC+ committee this month recommended the group deepen its output cuts by an additional 600,000 barrels per day.

Saudi Arabia supports the further oil production cut, but Russia is yet to announce its final position on the matter.

The minister said he was still talking with Moscow and that he was confident of Riyadh’s partnership with the rest of the OPEC+ group.

“We did not run out of ideas, we have not closed our phones. There is always a good way of communicating through conference calls,” he said.

Regarding the coronavirus, which has impacted OPEC member Iran, he said OPEC+ members should not be complacent about the virus but added he was confident every OPEC+ member was a responsible and responsive producer.

The flu-like SARS-CoV-2 virus, which first broke out in China, has now spread to more than 20 countries.

“Of course there is an impact and we are assessing, but we’ll do whatever we can in our next meeting and we’ll address that issue,” UAE Energy Minister Suhail Al-Mazrouei said at the same industry conference.

Saudi Aramco CEO Amin Nasser on Monday said he expected a short-lived impact on oil demand.

“We think this is short term and I am confident that in the second half of the year there is going to be an improvement on the demand side, especially from China,” he said.

Oil climbed on Tuesday as investors sought bargains after crude benchmarks slumped almost 4 percent in the previous session, although concerns about the global spread of the virus capped gains.