MITSUBISHI’S NEW REGIONAL JET - Competition for Airbus and Embraer?

​SkyWest Airlines has recently ordered 100 of the new Mitsubishi MRJ90 regional jets, adding 100 options for more.  At the present time, these aircraft cannot be used for service with SkyWest’s Legacy airline affiliates (Delta Connection, American Eagle, and United Express.) Why? Does this foreshadow a major new shakeup of the regional airline industry?
Japan’s Mitsubishi Aircraft Corporation (“MAC”) has been developing a new regional jet for the past fourteen years.  This corporation is a partnership between the majority owner, Mitsubishi Heavy Industries and the minority owner, Toyota Motor Corporation.  Following an earlier period of development, the MRJ concept was introduced in 2007.  Since then, the MRJ has suffered significant setbacks, racking up nearly $1.28 Billion in development costs.  To recoup this investment, Mitsubishi projects that it will have to sell as many as 400 MRJ aircraft.  It is likely that China will present a strong marketing opportunity for sales of the Mitsubishi MRJ.  According to an article published on August 27, 2018 by Aviation Week and Space Technology, MAC expects to sell 619 aircraft of the MRJ class to China in the next twenty years.
The MRJ will be the first airliner designed and produced in Japan since the 1960’s, when it produced the YS-11, which was produced at a loss.
Mitsubishi has developed two different models of the MRJ, the MRJ70, that has 69 to 80 seats, and the larger MRJ90, having 81 to 90 seats. There is no MRJ model under development that will be useful in the U.S. regional airlines 50-seat market.  Both the MRJ70 and the MRJ90 are offered in three different versions: the Standard Model, the “ER” and the “LR” models. 
All but two of the six models run up against the “Scope Clause” that the U.S. Legacy carriers have with their pilot’s union. These Scope Clauses place a complete restriction on their Regional Airline Affiliates flying any aircraft with a maximum takeoff gross weight (“MTOGW”) of 86,000 pounds or higher.  There have been conflicting reports about the MTOGW of the MRJ70, but according to the official Mitsubishi web site, the MRJ70 Standard comes in at 81,240 pounds and the MRJ70ER comes in at exactly 86,000 pounds.  The MRJ70LR has a MTOGW of 89,000 pounds.  All three of the MRJ90 models are well beyond 86,000 pounds MTOGW of the Scope Clauses.
Orders for the MRJ70 model are few.  In the U.S. market, Trans States has ordered 5, Sky West has ordered 7 and AeroLease has ordered 2.  The MRJ90 is faring much better, with Trans States ordering 50 (with options for 50 more), Sky West ordered 100 (with 100 options) and AeroLease ordering 10 (with 10 options.)  Even so, it will not be until mid-2020 that any of these aircraft will be delivered to the Regional Airlines.
Mitsubishi makes some very aggressive claims in its MRJ sales literature.  They say that the design is “optimized”, yielding the highest fuel efficiency, the lowest environmental impact, and the most passenger comfort among the 70 to 90 seat jets “ever to take flight.” Mitsubishi claims that the MRJ has the “lowest cost to operate of any aircraft in its class.” (This includes fuel burn and maintenance cost.) Among other claims, Mitsubishi states that its “advanced aerodynamics” produces a low-drag fuselage and tail cone, a streamlined nose, and an optimized winglet.  The MRJ has a full fly-by-wire flight control system, which is arguably the most advanced in this regional jet class. Importantly, the MRJ uses the newly developed Pratt & Whitney Geared Turbofan engine, the MRJ70 using the PW1215G model and the MRJ90 using the PW1217G model.  Mitsubishi claims a 20% lower fuel burn than comparable engines in this thrust class (15,600 to 17,600 pounds thrust.)
One of the negative aspects of the MRJ70 and the MRJ90 is its limited range. The MRJ70 Standard has a range of only 1,020 nautical miles. The MRJ70ER has a range of 1,670 nautical miles and the MRJ70LR has a range of 2,020 nautical miles.  The three versions of the MRJ90 have ranges of 1,150, 1,550, and 2,040 nautical miles respectively.  In comparison, the Airbus A220-100 has a range of 3,100 nautical miles with a passenger capacity of 108 to 133 passengers.  The Embraer E2 models have range capability starting at 2,150 nautical miles and going up to 2,450 nautical miles.  So, even the “long range” versions of the MRJ do not meet the range of the most limited Embraer E2 models.  However, considering that the target market for the MRJ is the regional airline market, and given that this market generally is a short-to-medium stage length market, the range limitation may not be as damaging as it seems.
Today, the U.S. regional airlines operate jet aircraft that are the products of Canadair/Bombardier (now owned by Airbus) and Embraer (soon to have 80% Boeing ownership.) No Japanese designed and manufactured airliner has been operated in the U.S. since around 1982, when Mid-Pacific Airlines operated the YS-11 in Hawaiian service. (American Eagle also operated the YS-11.)  Mitsubishi has commercial agreements with Boeing wherein MAC’s majority owner manufactures fuselage panels for the B777 and wingboxes for the B787, among other issues involving support.  Now that Boeing will be supporting Embraer’s RJ products, how will that apparent conflict with the MRJ work itself out?  Will Japan penetrate the U.S. aircraft market as it has in the automobile market?  Given Toyota’s involvement with Mitsubishi and the MRJ, and given the top-of-the-line marketing claims of MRJ, can this happen?  Will Mitsubishi move to produce a replacement for the ERJ145?