By Mariko Kageyama

Say you are a maker of a brand new aircraft. You show off its blueprint and miniature model and take orders before you have even constructed it. What legal risks are you willing to assume at this stage? Though this may seem a quintessential contract question, a real case involving Mitsubishi provides us an interesting twist.

On September 28 and November 18, 2016, the first two Mitsubishi Regional Jet MRJ90 test aircraft made successful ferry flights from Nagoya, Japan to Moses Lake, Washington. Built by Mitsubishi Aircraft Corporation, the MRJ90 is the first all-new commercial airplane manufactured in Japan in the last half a century. A fleet of MRJ90 test aircraft will be undergoing test flights in partnership with a local engineering firm, AeroTEC, which is based at the Grant County International Airport in Moses Lake. A team of over 200 aerospace engineers in Moses Lake, Seattle, and Nagoya is aiming to make the MRJ90’s formal certification process as smooth as possible to allow entry its into service in 2018.

The Federal Aviation Administration (FAA) governs aircraft certification. The FAA issues type certificates to new aircraft designs that satisfy minimum standards required for safe flights, or “airworthiness.” In addition, the formal US-Japan Bilateral Aviation Safety Agreement and its Implementation Procedures for Airworthiness, in effect since 2009, allow for efficient and coordinated administration of aircraft type certification processes between the two countries. The MRJ90 will be the first Japanese aircraft to which this treaty is fully applied as it test flies under extreme weather conditions in different parts of the United States. Indeed, at the G7 Transport Ministers’ Meeting in September 2016, officials from both countries reaffirmed their commitment to cooperate on the MRJ90 program.

Although the intergovernmental legal environment has become increasingly supportive of Mitsubishi’s venture since its launch in 2008, the Japanese company itself recently realized an additional, uniquely American regulatory hoop it must jump through: compliance with “scope clauses” imposed by the U.S. aviation industry.

Scope clauses are provisions found in labor agreements between pilots of major U.S. airlines and their employers, often negotiated during collective bargaining deals. Among other restrictions, scope provisions typically forbid major airline companies from outsourcing the job of flying aircraft of a certain size or larger to regional affiliate carriers. Any aircraft flying above the threshold size, meaning any aircraft exceeding 76 seats and having a certificated maximum takeoff weight (MTOW) of 86,000 lb. (39 tons), must be flown by mainline pilots per their seniority status instead of non-union pilots subcontracted via lowest bid. In other words, scope clauses put a cap on the size of aircraft that can be operated by regional affiliate carriers to no more than 76 seats/86,000 lbs.

The MRJ90’s original specifications, released in 2013, show it can accommodate 92 seats and has the capacity to fly up to 1,800 nautical miles; about the distance between Seattle and Chicago. But its MTOW clearly exceeds the limit of 86,000 lb. The seat count can be adjusted by reconfiguring cabin space, but MTOW compliance is no easy fix. If the plane slims down by 1,000 lbs. to fall under the contractual maximum, then it cannot contain enough fuel to operate its maximum flight range. It would therefore need to sacrifice fuel load to fly as a regional carrier.

Per the Railway Labor Act, aviation labor unions, notably the Air Line Pilots Association, International (ALPA), have control over whether current scope clauses can be relaxed, including seemingly arbitrary amounts of aircraft weight (Examples: Delta; United; also see Alaska without a respective scope section). It may come as no surprise that mainline airline companies have been under financial pressure to let regional careers fly larger planes. At the same time, those companies are in constant tension with the pilot unions that continue to defend scope clauses to protect their members’ jobs.

To add another wrinkle, evolving flight technology is putting further tension on these clauses. Featuring state-of-the-art engines and aerodynamic reducing fuel consumption, noise and emission, the MRJ90 is a next-generation regional jet that has great potential to expand its customer base worldwide. Mitsubishi has so far secured over 400 orders (meaning firm orders plus options) including a 2012 orders from Utah-based SkyWest Airlines and a 2011 order from St. Louis-based Trans States Airlines. They are the airline operators of United Express and American Eagles, respectively.

It will be very interesting to see whether the Japanese airframer will gear up to make the MRJ90 lighter and fully scope-compliant, or alternatively shift its focus to delivering a smaller, less powerful MRJ70 model to SkyWest and Trans States. Even more remote possibilities are ones in which the pilot unions allow modification of scope clauses or the major U.S. airlines agree to buy overweight MRJ90s and use their own pilots to fly them. In the end, the decisions that Mitsubishi makes in regard to the MRJ90 will have long-lasting consequences, as they will affect the aircraft’s certification with the FAA.

Image Source: Esa Kaihlanen