Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Tokyo Stock Exchange  >  Mitsubishi Heavy Industries, Ltd.    7011   JP3900000005

MITSUBISHI HEAVY INDUSTRIES, LTD.

(7011)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector newsMarketScreener StrategiesAnalyst Recommendations

Delta pilots oppose big regional jets, could be issue for Embraer, Mitsubishi

11/25/2016 | 06:12pm EST
A Delta Air Lines Airbus A330 aircraft takes off at the Charles de Gaulle airport in Roissy

MONTREAL (Reuters) - Delta Air Lines Inc (>> Delta Air Lines, Inc.) pilots are expected to keep existing rules in their new labor contract that prevent the U.S. No. 2 carrier from flying aircraft above a certain weight on regional routes, in a blow to Embraer SA (>> Embraer SA) and Mitsubishi Heavy Industries Ltd (>> Mitsubishi Heavy Industries Ltd), whose latest models exceed that limit.

MONTREAL (Reuters) - Delta Air Lines Inc (>> Delta Air Lines, Inc.) pilots are expected to keep existing rules in their new labor contract that prevent the U.S. No. 2 carrier from flying aircraft above a certain weight on regional routes, in a blow to Embraer SA (>> Embraer SA) and Mitsubishi Heavy Industries Ltd (>> Mitsubishi Heavy Industries Ltd), whose latest models exceed that limit.

The pilots' new labor contract will keep what is known as a "scope clause," which restricts planes heavier than 86,000 pounds and with more than 76 seats from being flown on regional routes, two sources familiar with the matter told Reuters.

Voting results on the new contract are expected on Dec. 1.

The clause effectively protects well-paid pilot jobs at major airlines, as it prevents the carrier from using bigger planes on outsourced regional routes, which generally pay less well and have inferior working conditions.

When planemakers such as Brazil's Embraer and Japan's Mitsubishi designed their latest regional jets, with heavier but more fuel-efficient engines, they expected the scope clause to have loosened, but unions have managed to hold on to it.

Delta's vote will follow similar decisions by unions at American Airlines Group Inc (>> American Airlines Group Inc) and United Continental Holdings Inc (>> United Continental Holdings Inc) earlier this year and in 2015.

Pilots' opposition to relaxing scope clauses is a problem for Embraer’s E175-E2 regional aircraft that is to be delivered in 2020, and Mitsubishi’s MRJ90 jet, slated for delivery in mid-2018, which both exceed the weight limit.

UBS downgraded Embraer to a 'sell' rating this week after it resumed coverage, citing risks from the scope clause pushback at American, Delta and United. Analyst Darryl Genovesi said it was unlikely the carriers would fly the E2 on only mainline routes, due to higher costs.

"This puts the viability of the E175-E2 at risk since most of the demand for it originates at those three airlines," Genovesi wrote in a note to clients.

MORE EFFICIENT

Regional carrier SkyWest Inc (>> SkyWest, Inc.), which operates flights for Delta, among others, is the launch customer for the E175-E2, with 100 firm orders.

In a statement, Embraer said its existing E-175 dominates the 70-seat market where it holds 84 percent of market share and the Brazilian planemaker would continue to sell that jet past 2020 if scope clauses do not change.

However, the statement said: "Embraer believes scope clauses will eventually be relaxed in the future as fuel prices increase and airlines look for more efficient products."

A Mitsubishi spokesman was not available for comment, outside normal business hours in Japan.

In September, the company said it is working with customers to address weight issues for the MRJ90, which is about 600 kilograms (1323 lbs) too heavy.

U.S. pilot unions have taken an increasingly hard line on higher salary demands and are making fewer concessions to U.S. carriers.

Their current stance against changing scope clauses could, however, be a boon for Embraer's Canadian rival Bombardier Inc (>> Bombardier, Inc.), which sees it as an opportunity to boost sales of its CRJ-900, which fits current weight limits, one of the sources said.

Mesa Air Group Inc [MESAR.UL] Chief Executive Jonathan Ornstein said he will not purchase new planes that do not comply with existing scope clauses as he does not believe the current limits will be changed in the near future.

Instead, the Arizona-based regional carrier will buy more current generation E-175s, along with additional CRJ900s to replace 38 regional jets being phased out over the next four years.

"I don't think there's any chance the pilots will change their weight requirements. Zero," Ornstein said.

(Reporting By Allison Lampert; Editing by Bill Rigby)

By Allison Lampert


© Reuters 2016
Stocks mentioned in the article
ChangeLast1st jan.
CHANGE INC. -0.15% 3380 End-of-day quote.-4.11%
CONTINENTAL HOLDINGS CORPORATION -2.43% 20.1 End-of-day quote.-2.90%
EURO / BRAZILIAN REAL (EUR/BRL) 0.03% 6.3815 Delayed Quote.-0.49%
LETS HOLDINGS GROUP CO., LTD. 1.58% 7.72 End-of-day quote.-0.77%
MITSUBISHI HEAVY INDUSTRIES, LTD. -3.39% 3218 End-of-day quote.1.96%
All news about MITSUBISHI HEAVY INDUSTRIES, LTD.
01/14VESTAS WIND A/S : Cuts 220 Jobs Amid Integration of MHI Offshore Wind
DJ
01/14VESTAS WIND A/S : Wind turbine maker Vestas to cut 220 jobs in Denmark and UK
RE
01/07MITSUBISHI HEAVY INDUSTRIES : MHI Thermal Systems Receives 2020 "Agency for Natu..
AQ
2020Nikkei ends at over 30-year high on hopes for expanded U.S. stimulus
RE
2020Nikkei scales three-decade high on expanded U.S. stimulus hopes
RE
2020Siemens Energy has no plans to sell Siemens Gamesa - Handelsblatt
RE
2020MITSUBISHI HEAVY INDUSTRIES : Japan sets record $52 billion military budget with..
RE
2020VESTAS WIND SYSTEMS A/S : - Capital increase by a nominal value of DKK 5,049,337..
AQ
2020VESTAS WIND A/S : and Mitsubishi Heavy Industries close partnership agreement, a..
AQ
2020Japan shares end higher on vaccine roll-outs, BOJ tankan
RE
More news
Financials
Sales 2021 3 685 B 35 516 M 35 516 M
Net income 2021 15 089 M 145 M 145 M
Net Debt 2021 1 330 B 12 821 M 12 821 M
P/E ratio 2021 52,9x
Yield 2021 2,33%
Capitalization 1 081 B 10 418 M 10 423 M
EV / Sales 2021 0,65x
EV / Sales 2022 0,63x
Nbr of Employees 81 631
Free-Float 91,4%
Chart MITSUBISHI HEAVY INDUSTRIES, LTD.
Duration : Period :
Mitsubishi Heavy Industries, Ltd. Technical Analysis Chart | 7011 | JP3900000005 | MarketScreener
Technical analysis trends MITSUBISHI HEAVY INDUSTRIES, LTD.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 10
Average target price 2 886,00 JPY
Last Close Price 3 218,00 JPY
Spread / Highest target 11,2%
Spread / Average Target -10,3%
Spread / Lowest Target -37,8%
EPS Revisions
Managers and Directors
NameTitle
Seiji Izumisawa President, CEO, Director & Chief Strategy Officer
Shunichi Miyanaga Chairman
Hisato Kozawa CFO, Representative Director & Executive Officer
Michisuke Nayama Chief Technology Officer & Executive VP
Eisaku Ito CTO, Executive Officer & GM-ICT Solutions
Sector and Competitors
1st jan.Capitalization (M$)
MITSUBISHI HEAVY INDUSTRIES, LTD.1.96%10 418
HONEYWELL INTERNATIONAL INC.-3.16%144 526
SIEMENS AG1.92%115 735
GENERAL ELECTRIC COMPANY4.91%99 249
3M COMPANY-5.29%95 493
ILLINOIS TOOL WORKS INC.-0.34%64 314