Jan 31, 2023
UK, Italy, Japan Consider Plan to Oversee New Fighter Jet
(Bloomberg) -- Italy, Japan and the UK aim to set up an international organization by the end of the year to push through their plans for a next generation fighter jet, according to people familiar with the discussions.
The three countries’ parliaments would then ratify the body in the middle of next year, said the people who asked not to be named on private talks. The three nations announced last year the so-called Global Combat Air Programme to develop the jet.
Discussions are ongoing and the timeline could slip, especially as the three parties have to work out a number of issues, including where such an organization would be based and ownership, the people said. Talks are centering on whether the UK would be the project’s lead partner or if the three nations would have equal ownership. One of the people said a three-way split would provide the project a sounder commercial and industrial footing.
The three countries announced in December plans to work together on a next generation warplane in a bid to bring a new fighter into service by 2035.
UK, Italy and Japan Merge Plans for Next-Generation Fighter (1)
The deal to create the Global Combat Air Programme effectively combines the European Tempest and Japanese F-X projects, both of which have been in the pipeline for years.
As part of the political agreement announced last year, London-based BAE Systems Plc, Europe’s biggest defense company, and Italy’s Leonardo SpA — partners on the Eurofighter Typhoon and Tempest — will work with F-X lead contractor Mitsubishi Heavy Industries Ltd on the project.
In parallel to the international organization, negotiations are continuing on the creation of a joint venture, with the aim of setting the basis for commercial deals from end-2024 and 2025.
However, there are still several issues to iron out, including who does what as well as intellectual property and commercial rights.
One of the drivers behind the project is the potential ability to share and access technology, as large defense procurement contracts often give buyers of aircraft, tanks and other weapons little flexibility. Such deals also often come with many strings attached, for example in terms of maintenance, sharing know-how and re-exports.
One question the three parties need to tackle is how to handle any delays and whether commercial contracts can be signed by the companies before the relevant structures and agreements are in place, one of the people said.
--With assistance from Isabel Reynolds.
©2023 Bloomberg L.P.
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