UPDATE 2-JAL gives Japan's flagging home-grown regional jet boost with orders
(Adds value of Embraer order)
By Tim Kelly
TOKYO Aug 28 (Reuters) - Japan Airlines Co said on Thursday it has agreed to buy 32 Mitsubishi Regional Jets worth around $1.5 billion, giving Japan's first domestically manufactured commercial passenger plane in half a century a needed sales boost.
The carrier also signed a firm order for 15 regional E-Jets from Brazil's Embraer for delivery from 2015. The value of the firm order is estimated at $677 million, Embraer said on Thursday, adding that the airline had agreed to options on an additional twelve E-Jets.
Japan Airlines said it will start deploying the MRJs on domestic routes in 2021.
The MRJ venture - 64 percent owned by Mitsubishi Heavy Industries and one-tenth owned by Toyota Motor Corp - has struggled to win orders amid production delays and withering competition from the world's two leading regional aircraft makers, Embraer and Bombardier Inc.
The venture, which has a $1.9 billion development budget, risks repeating the commercial flop of its made-in-Japan predecessor, the YS-11 in the 1960s, unless it can garner more demand. With fewer than 200 confirmed orders, the 70- to 90-seat jet is likely still far away from breaking even, analysts said.
Japan Airline's rival home carrier ANA Holdings Inc has ordered 15 of the Mitsubishi aircraft with options for 10 more, and plans to fly the aircraft from 2017.
The aircraft maker says the jet will burn 20 percent less fuel than comparable jets. That however is mostly the result of fuel-efficient Pratt & Whitney PurePower engines rather than innovations in the air frame design. Continuación...