Mitsubishi Heavy Industries Ltd. is considering sharply scaling back the staff and budget for developing the first domestically manufactured regional jet, effectively freezing the operation due to a slump in demand caused by the novel coronavirus pandemic, sources close to the matter said Thursday.

The Japanese firm's subsidiary Mitsubishi Aircraft Corp. has been developing a small aircraft called the Mitsubishi SpaceJet, previously known as the Mitsubishi Regional Jet. Its initial delivery to All Nippon Airways Co., originally planned for 2013, has been postponed six times to 2021, or possibly later, due to problems with parts.

The new jet, if successfully launched, would be the first commercial aircraft manufactured in Japan in half a century.

Mitsubishi Heavy is expected to announce the decision on Oct. 30 when it unveils a new medium-term business strategy, the sources said.

Delivery of the Mitsubishi SpaceJet has been delayed six times so far despite around 1 trillion yen ($9.6 billion) having already been poured into the development of the airplane.

The SpaceJet is designed to carry around 90 passengers with what the company calls "game-changing" fuel efficiency. Mitsubishi Heavy will likely continue aiming for a type certificate for the jet, the sources said.

In the business year through last March, Mitsubishi Heavy posted an operating loss for the first time in two decades due to ballooning SpaceJet development costs.

In May, President Seiji Izumisawa said the company would review the development schedule "as a whole" and unveiled a plan to more than halve spending for the project to about 60 billion yen in fiscal 2020 through next March.

Japan has not seen a domestically manufactured aircraft since the YS-11 turboprop plane by Nihon Aircraft Manufacturing Corp.

Mitsubishi Heavy launched the MRJ project in 2008 and the maiden flight took place in November 2015.

Airlines are struggling amid the pandemic that has led many countries to impose travel restrictions.

==Kyodo

© Kyodo News International, Inc., source Newswire