January 26, 2018 / 7:28 AM / a year ago

UPDATE 1-Mitsubishi Aircraft loses jet order in blow to high-profile project

* Eastern Air Lines cancels 20 orders

* Orders for 150 jets by U.S. airlines “troubled” - analyst

* First delivery expected by mid-2020 (Adds details of the MRJ order book)

TOKYO, Jan 26 (Reuters) - Mitsubishi Aircraft Corp said on Friday that Eastern Air Lines has cancelled an order for 20 of its Mitsubishi Regional Jets, or MRJs, the first cancellation for the long-delayed commercial aircraft.

The loss is a blow to parent Mitsubishi Heavy Industries Ltd’s project to build Japan’s first commercial aircraft in 50 years. The venture has been delayed five times and seen costs spiral and given rivals a leg up as a result.

While the cancellation leaves Mitsubishi Heavy with 213 firm orders from six customers, two more sizable orders from U.S. buyers for a combined 150 jets “are troubled”, Leeham Co analyst Bjorn Fehrm said in a note to clients.

Negotiations in the U.S. to change clauses with pilot unions that limit the size of the aircraft that regional airlines can fly have not been altered as hoped, he wrote, meaning U.S. buyers SkyWest Inc and Trans States Holdings Inc are still not allowed to fly the 90-seat MRJ.

Despite the repeated delays, Hisakazu Mizutani, president of Mitsubishi Aircraft, expressed confidence in December that the manufacturer was on track to begin deliveries by mid-2020.

“We can just about make it,” he said at the time.

Japan Airlines Co Ltd has ordered 32 jets, while launch customer ANA Holdings Inc has ordered 15. (Reporting by Maki Shiraki, Sam Nussey and Minami Funakoshi, Writing by Chris Gallagher, Editing by Sherry Jacob-Phillips and Malcolm Foster)

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