BOEING DECLINES TO INVEST IN DEVELOPMENT OF JAPANESE JET 787 PARTNER MITSUBISHI PLANS TO BUILD REGIONAL PLANE

June 22, 2007

The Boeing Co. will not invest in a regional jet that longtime friend and partner Mitsubishi Heavy Industries of Japan hopes to develop, Boeing Commercial Airplanes head Scott Carson said Wednesday.

But Boeing will try to help Mitsubishi in other ways with the proposed plane, he said.

"There are lots of guys building regional jets, and lots of 'em want to talk with us," Carson said in an interview at the Paris Air Show.

Mitsubishi is manufacturing the composite wings for Boeing's 787 Dreamliner - the first time that Boeing has allowed anyone outside the company to do this kind of critical work.

Carson met earlier in the week at the air show with Mitsubishi Chairman Takashi Nishioka.

"We have had a long, long relationship with Mitsubishi, and they asked us if we would be willing to engage in a level of support on their activity as they try and build an airplane," Carson said. Mitsubishi also asked if Boeing would invest in the project.

"We told them we were not interested in investing in that end of the market, but we would be happy to engage with them and support their work," he said.

Carson, president and chief executive of commercial airplanes, said Boeing and Mitsubishi are trying to figure out "what that work statement might look like."

He said Mitsubishi likely will want Boeing's help in after-delivery support.

"That's the thing that everyone turns to us and says we do really well," Carson said. "The thing that everyone covets in Boeing in the after-delivery support is spares infrastructure," Carson said, meaning spare parts. Boeing also has much-sought-after software tools that keep track of parts and their location, he said.

Boeing and Airbus dominate the market for bigger passenger planes, those with more than 100 seats.

The regional jet market has been dominated by two major players, Bombardier of Canada and Embraer of Brazil.

But that market is about to get crowded. A consortium of Chinese companies and research institutes has been working on a Chinese regional jet, the ARJ21. That plane could fly as soon as next year.

Carson said the Chinese have not approached Boeing about help.

Another new competitor in this market is Sukhoi of Russia, which has been seeking a partner on the proposed Superjet 110.

If Mitsubishi goes forward with its plane, the MRJ, it will be the first time Japan has produced a passenger plane since 1973, when production stopped on the YS-11. That was a turboprop developed by a Japanese consortium.

Mitsubishi has said it hopes to start production of its regional jet by early next year. Deliveries would start in 2012.

The company is considering two versions of the plane. The MRJ70, would carry 70 to 80 passengers and have a range of 910 to 2,110 nautical miles, according to a brochure.

The MRJ90 would carry 86 to 96 passengers and have a range of 870 to 1,790 nautical miles. Those ranges are based on three versions of the planes: standard, extended range and long range.

The planes likely would be built at Mitsubishi's plant in Nagoya. That is also where Mitsubishi manufactures the composite wings of the Dreamliner.

In addition to the work on the 787, Mitsubishi makes fuselage panels for Boeing's 777.

A full-size mockup of the forward fuselage of the MRJ is on display at the Paris Air Show, and invited guests can go inside the cabin to see the interior concept.

In its brochure, Mitsubishi says that its regional jet would burn 20 percent less fuel than existing planes of the same size.

It also says that maintenance cost would be significantly reduced by using composites, though it is not clear how much of the jet would be made of carbon fiber.

P-I aerospace reporter

James Wallace can be

reached at 206-448-8040

or [email protected]

Read his Aerospace blog at

blog.seattlepi.com/aerospace.

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