Japan’s plan to acquire a next-generation fighter jet to replace the aging F-2 could offer a major business opportunity for aerospace firms, and U.S. defense primes would have the edge in any international competition, according to analysts.
In July, the Defense Ministry in Tokyo released a request for information regarding fields of technologies or products that industry could contribute to the development of a new fighter. It also sought information about fighter types that companies would propose if Japan decided to buy or upgrade an existing one to meet its needs.
Responses were due back by the end of August, said Air Attaché Col. Yasuhiro Ogawa during an interview with National Defense at the Japanese Embassy in Washington, D.C.
“We’re going to find out which is best for us in terms of performance, cost efficiency and so on,” he said.
Tokyo has three options for pursuing the next-generation fighter, also known as the F-3, he noted: build a new fighter indigenously; partner with foreign firms for co-development; or purchase/upgrade an existing aircraft.
The Defense Ministry’s new Acquisition, Technology and Logistics Agency will conduct an analysis of alternatives. The process is in its “early stages,” he said.
Up to two additional RFIs could be issued. A decision about which path to pursue is expected by the end of Japanese fiscal year 2018, which is March 31, 2019, Ogawa said.
The replacement jet needs to be factored into Japan’s next midterm defense program planning cycle, which runs from fiscal years 2019 to 2023. The F-2 is expected to reach the end of its service life around 2030, he noted.
Meanwhile, China continues to improve its fighter capabilities — it has developed two stealth prototypes — and has been acting more aggressively towards its neighbors.
The number of Japanese fighter scrambles against Chinese aircraft increased from fewer than 100 in 2010 to more than 500 in 2015, according to the Defense Ministry.
“The security environment around Japan has become increasingly severe,” Ogawa said. The “F-2 replacement program is one of our efforts to maintain air defense capability and to ensure air superiority surrounding Japan.”
The capability requirements for the F-2 replacement have yet to be firmly decided, but broadly speaking Japan is interested in stealth, maneuverability, sensor fusion and new engine technologies, he said. The ability to conduct ground-strike and close-air support missions could also be sought, he added.
Japan has already committed to buying 42 stealthy F-35 joint strike fighters, but the aircraft might not meet Japan’s needs for air-to-air combat against an advanced enemy, said Richard Aboulafia, vice president of analysis at the Teal Group, an aerospace and defense market analysis firm.
“They want a fast, high-altitude … air superiority fighter and interceptor,” he said. “The F-35 is no one’s idea of that plane.”
The Defense Ministry procured more than 90 F-2s, Ogawa noted. It is unclear how many next-generation fighters Japan would ultimately buy to replace them.
“If you’re going to spend the money on developing them then you want to buy in bulk,” said Dan Darling, an Asia and Pacific Rim military market analyst at Forecast International. Procuring 100 would be “a decent ambition,” he said.
Ogawa said the Defense Ministry would need to come up with detailed cost estimates for the new project as the next midterm defense program is developed.
“Obviously the F-2 replacement program is a very, very important program in terms of national defense or air defense of Japan,” he added. “It’s a very big project. We need a lot of budget and we take accountability for the taxpayers.”
The Defense Ministry and Mitsubishi Heavy Industries are already doing research-and-development work in pursuit of new fighter technology. In April, MHI completed the first flight of the X-2 advanced technology demonstrator, which the company described in a press release as a “prototype stealth aircraft” that has been “engineered for extremely high maneuverability.”
“The purpose of the X-2 project is … to get technology to develop a next-generation fighter by ourselves,” Ogawa said.
“But at the same time we want some kind of bargaining power,” he added. “We would like to demonstrate our technology to others” to gain leverage in potential negotiations with overseas partners.
Much more work would be required to turn the X-2 design into a combat-ready plane, experts noted.
“Scaling it up — that challenge is huge,” Aboulafia said. “But it does show they’ve got the intent and the design teams capable of working on a larger fighter. It would just take a much greater allocation of resources.”
MHI did not respond to a request for comment on the F-2 replacement project.
Developing a new fifth-generation fighter indigenously from scratch would likely cost $30 billion to $40 billion, at minimum, Aboulafia said. Such a price tag could be cost prohibitive.
“I’m not sure where it would come from just given the size of the Japanese budget,” he said. “It just doesn’t have the bandwidth for anything like that.”
Cooperating with overseas partners on the F-2 replacement would likely be much more cost effective than trying to develop it indigenously, experts said.
“Mitsubishi can maintain its cutting-edge skills while still partnering with a Lockheed Martin” or another company, said Loren Thompson, a defense industry consultant and the chief operating officer at the Lexington Institute. “It would just make more sense to partner than to go it alone.”
Contracts for an F-2 replacement could be lucrative, as competition in the defense aerospace market grows fiercer.
“That’s a big fighter project, and if anybody can angle themselves in there it’s worth their time,” Darling said.
U.S. defense contractors are already in talks with Japanese officials about participating in the effort.
“We are certainly interested in another potential opportunity to bolster our longstanding partnership with Japan,” Lockheed spokesman John Losinger said in an email.
“We are proud of our successful partnerships with Japan on the F-35 program and Mitsubishi Heavy Industries on the F-2 program,” he added. “We look forward to learning more about Japan’s F-3 plans as discussions progress.”
Boeing also has the project on its radar.
“Should Japan decide to invite international collaboration, we would be interested in participating,” Boeing spokeswoman Caroline Hutcheson said in an email. “Boeing’s history, spanning more than 60 years of partnerships with industry in Japan, sets us apart from our competitors.”
The company has had discussions with representatives of the Japanese government and industry about development of the F-2 replacement, according to a source at Boeing who requested anonymity to discuss the status of talks.
Other options for Japan include buying an existing European fighter or co-developing a new one with a European manufacturer such as Saab or the Eurofighter consortium.
But analysts said such an outcome is unlikely, noting that there are no Europe-made stealth fighters and no European companies have ever served as a prime contractor on such a project.
“The Europeans do not have credible credentials” to help lead a fifth-generation fighter program, Thompson said.
Japan’s strategic relationship with the United States could also give U.S. companies an advantage, analysts said.
“Between the defense cooperation between the two countries, the security policies that are very close and intertwined, and the fact that the U.S. already has vendors producing stealth [aircraft] … it gives them a very big leap ahead of anybody else,” Darling said.
U.S. firms have an established foothold and a long practice of working with local aerospace companies such as Mitsubishi, he noted. “I would never say never but I would give it long odds” that a European prime would win.
Ogawa said that a desire for interoperability could potentially benefit U.S. companies in any competition.
“We have a long experience and history cooperating with each other and introducing arms including fighter aircraft,” he said. “We have no European fighters and we have no experience introducing European fighters.”
A spokesperson for Saab declined to comment for this story. The Eurofighter consortium did not respond to a request for comment.
Among U.S. primes, experts said Lockheed has a clear advantage when it comes to winning a potential F-2 replacement contract.
“Lockheed would bring the technological knowhow to the table, so it would defray some of the cost on the Japanese side,” Darling said.
The company is the prime contractor on the F-35 program, and also helped develop the F-2.
Lockheed is “the global leader in fifth-generation fighter technology” and “the logical partner” for Japan, Thompson said.
In its search for an F-2 replacement, the Defense Ministry isn’t just looking to acquire greater air combat capability.
“We also need to consider maintenance and the enhancement of the Japanese industrial and technology base through this program,” Ogawa said. “We are also looking to factor in a spinoff effect on the private sector, and also to gain future aircraft technology.”
A licensing or co-development agreement with a foreign firm could fit the bill in this regard.
“If there was any kind of partnership for technology transfer it would almost certainly be to Lockheed’s advantage,” Aboulafia said. “They’re the only stealth fighter producer in town right now.”
While Boeing has a long-standing relationship with Japan, it is not currently building any stealth fighters.
Paying Boeing to develop a new one from scratch could be cost prohibitive for the Defense Ministry. The Japanese government might need the company to contribute significant funds to the project, which could be a deal-breaker for Boeing, Aboulafia said.
“In the absence of a willingness to invest their own cash in a stealth fighter, which of course is something they would never ever do [for Japan], they don’t have much of a chance here,” Aboulafia said.
As an alternative, Boeing could offer to enhance the capabilities of the F-15 as a lower-cost option, Aboulafia said.
“One extremely unlikely but not inconceivable possibility is that Boeing approaches them with the Silent Eagle and says, ‘Hey, look, it gives you some [limited] stealth. The systems are great. … You have the F-15 in your inventory. You even have an industrial base that could build major chunks of it [and] work with us on this.’”
However, Japan might view the F-15 design as too old, he noted.
When it comes to potentially purchasing existing fighters, analysts believe Japan would buy the F-22 Raptor, built by Lockheed and Boeing, if it were available.
“It meets their needs exactly,” Aboulafia said. The F-22 is “as good as you’ll get given current technology.”
Years ago, Tokyo expressed interest in procuring the Raptor but was prevented from doing so by a U.S. congressional ban on exporting it. The production line has since been shuttered after funding dried up and the Pentagon focused on the F-35.
“If the U.S. restarts the F-22 and allows Japan to buy it, then problem solved,” Aboulafia said.
But analysts don’t view that as a likely path.
Given “the amount of cost and time to rev that thing back up, I just don’t see the F-22 as any kind of option,” Darling said.
Ogawa said the F-22 has “very good” performance, but the price tag would be a consideration.
“We have interest but it depends how much it will cost,” he said. “It’s a matter of … cost efficiency.”
The most likely outcome is Japan deciding to pursue a modified joint strike fighter, experts said.
“If they bought off the shelf it would be logical to just buy a bigger lot of F-35s,” Darling said. The country is already slated to have joint strike fighter assembly and maintenance facilities located in Japan, he noted.
Thompson said: “I expect that in the end Japan will buy a larger number of F-35s than it’s currently committed to. … I think there are ways of making the F-35 address the requirements that are driving the perceived need for a Japanese fighter, and that’s probably the low-cost route to go.”
Japanese industry could participate in F-35 modification and upgrade efforts to enhance their industrial base, he added.
Ogawa said procuring some version of the joint strike fighter has not been ruled out.
“We have to study about introduction of existing aircraft, or some upgrade of existing aircraft,” he said. “Technically speaking, it means the F-35 can be one of the options.”
Aboulafia said the implications of the F-2 replacement project could be profound. “It would be either a nice enhancement to the F-35, the perfect enabler for an F-22 restart, or the emergence of Japan as a fighter producer.”
Photo: Japan's F-2 fighter (Air Force)