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Pandemic grounds launch of Japan’s IHI jet engine repair shop

  • May 16, 2020
  • , Nikkei Asian Review , 5:19 a.m.
  • English Press

AZUSA KAWAKAMI, Nikkei staff writer

 

TOKYO — IHI, Japan’s top maker of aircraft engine parts, will push back the opening of a new production and servicing center as the coronavirus pandemic sends shock waves through the aviation industry.

 

The launch of the facility in Saitama Prefecture near Tokyo, IHI’s first new plant in 21 years, had been slated for this year but will now be delayed roughly six months.

 

The 25 billion yen ($234 million) plant was intended to expand IHI’s commercial jet engine operations by capitalizing on growing demand for maintenance. Aircraft engines have 300,000 components and a life cycle of 20 years or more.

 

But with air travel down to a fraction of its previous levels and expected to take years to recover, aircraft makers are retrenching, putting at risk a business segment that generated half of IHI’s operating profit in fiscal 2019.

 

Boeing and Airbus have announced plans to scale back production, and General Electric has said it will cut 25% of its global aviation workforce.

 

Total turnover in Japan’s aerospace industry, including production and repair, rose 2% in 2019 to 1.86 trillion yen, data from the Society of Japanese Aerospace Companies shows. Much of this business comes from the likes of Boeing and GE.

 

The cutbacks have thrown a wrench in the operations of other major Japanese heavy industry companies as well. Mitsubishi Heavy Industries has temporarily closed a plant in Nagoya that manufactures wings for Boeing’s 787 Dreamliner. Kawasaki Heavy Industries and Subaru have also put parts production on hold.

 

The slowdown may affect Mitsubishi Heavy’s plans for a new 8 billion yen production facility for aircraft engine parts, which had been set to open as early as August but could be delayed if the demand outlook remains dim.

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