Trans States confirms order for new Mitsubishi jet-INTERVIEW

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Tuesday February 01, 2011 07:35:10 PM GMT

TOKYO, Feb 1 (Reuters) - U.S. airline operator Trans States Holdings Inc has finalised an order for a new regional passenger plane from Japan's Mitsubishi Aircraft, betting it will help slash fuel costs and improve competitiveness.

The Mitsubishi Regional Jet or MRJ, Japan's first domestically developed passenger jet, is due to go into service in 2014 at an expected selling price of about $40 million.

Richard Leach, president of Trans States, called the order for up to 100 of the planes a good opportunity rather than a risky investment.

"We don't believe it's risky at all, it's going to be a huge opportunity because we're going to be launching a product in a market place that nobody else would be able to compete with," Leach, pointing to fuel-efficiency that Mitsubishi has promised, told Reuters in an interview in Tokyo.

The MRJ will compete with jets made by Brazilian group Embraer and Canadian company Bombardier Inc as well as planes designed by Russian and Chinese firms.

Mitsubishi Aircraft, owned 64 percent by Mitsubishi Heavy Industries, has said the MRJ will be 20 percent more fuel efficient than rival aircraft, giving carriers lower operating costs.

But prospects of MRJ's technical and sales success, as well as the delivery schedule, are unclear and many carriers are still waiting to see how well it performs.

Privately held Trans States, based in St. Louis, includes Trans States Airlines, GoJet Airlines and Compass Airways.

It signed a letter of intent in 2009 with firm orders for 50 of the planes and options to buy another 50. The confirmed deal makes it the biggest customer for the plane ahead of All Nippon Airways, which has ordered 25.

Leach said the company is open to placing more orders.

"We all hope this drive-up in fuel price is temporary ... We don't want fuel to go up, but if it does it puts us in an advanced position with advanced aircraft efficient to operate under high fuel prices," he said.

The MRJ, built in 70- and 90-seat versions, will be powered by engines made by Pratt & Whitney, a unit of United Technologies.

Mitsubishi Aircraft said last year it was in talks with several potential customers and aimed to turn profitable in 10 years, when it expects to have sold 500 planes.

Due partly to delays in the MRJ's launch schedule, however, Mitsubishi was unable to secure any deals during the Farnborough Airshow last year, while Russian rival Sukhoi Co sold Superjet 100 models. (Reporting by Mariko Katsumura; Editing by Michael Watson)

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