Concerns that Japan’s aerospace industry is at a critical juncture have prompted Tokyo to start laying the groundwork for a new airliner programme – but its plans face daunting risks.
The fear of commercial aerospace stagnation is palpable in Japan’s recently released “Aircraft Industry Strategy” document, penned by a subcommittee in the sprawling bureaucracy of the Ministry of Economy, Trade and Industry (METI).
The document lays out the country’s current industrial situation, as seen by METI, and calls for a new airliner sometime in the 2030s, with Japan leading a coalition in a shared high technology effort.
Matsuo Kuremura, the aerospace and defence division director at METI, says the government is prepared to invest around Y5 trillion ($33 billion) in the effort.
METI describes an aerospace environment in flux, characterised by decarbonisation, continued progress in digital technology, the emergence of supply chain risks, and the rise of startups developing new technologies, such as advanced air mobility (AAM), electrification for smaller aircraft, and supersonic transport.
Against this backdrop looms the spectre of the failed Mitsubishi SpaceJet – formerly the Mitsubishi Regional Jet (MRJ). Rolled out in 2014 and making its first flight in 2015, at its peak the sleek regional jet had over 400 commitments from airlines, including key regional carriers in the USA. The Mitsubishi Aircraft Corporation, established specifically to develop the MRJ, was to become a major OEM and a paragon of Japanese industrial might.
METI catalogues the issues that doomed a programme characterised by high costs and slipping schedules. Problems included a lack of understanding about the certification of a modern airliner, design changes, problems with suppliers, and the flawed assumption that US pilot scope-clause rules would be relaxed - a precondition for the 90-seat M90 to enter service with US regional operators.
Mitsubishi Heavy Industries finally shut down the SpaceJet programme in February 2023, but the programme had been effectively frozen for two years. The failure was terrible blow, putting Japan’s airliner ambitions back to square one.
While Japan is a major Tier One supplier, industrial champions such as Mitsubishi, Kawasaki, and Shinmaywa are effectively at the beck and call of an overseas OEM, Boeing. Moreover, the majority of their work is on widebody programmes such as the 787 and 777. METI contends that this has caused Japan to largely miss out on strong growth in the world’s narrowbody market.
In addition, METI believes that the strong demand for narrowbody aircraft in the developing world will inevitably see a migration of aerospace industrial work to new markets. This will be at the expense of Japanese industry.
METI frets that Japan’s current aerospace setup forces Japanese companies to “wait for the actions of overseas OEMs”, but that changes in the world’s aerospace sector offer the opportunity for a “game change” to an industrial structure that allows for “autonomous growth.”
In contemplating a new aircraft programme, METI is adamant that the painful learnings from SpaceJet are not forgotten. Indeed, it suggests that the cathartic SpaceJet experience puts it in a better position to succeed in the future.
This success is contingent on Japan improving its integration capabilities, and if SpaceJet had one lesson, it is that working with overseas partners is essential.
“Our work with [SpaceJet] made it clear that there are limits to tackling the aircraft business with Japanese resources alone,” says METI.
Within the next few years Japan will gain some experience working with foreign partners, albeit in the defence arena. Along with Italy and United Kingdom, Japan is a partner in the Global Combat Air Programme (GCAP) to develop a successor to the Eurofighter Typhoon and Mitsubishi F-2.
Before joining GCAP Tokyo had contemplated a largely indigenous fighter programme with support from overseas companies. The decision to join GCAP was a nod to the complexity and costs involved with developing modern fighters. Through its research work in areas such as avionics, propulsion, and sensors, Japan was able to secure an important role in GCAP.
Similarly, SETI is implementing programmes “in markets where changes in technology and business models are expected,” such as in regional and turboprop aircraft, as well as in AAM.
As a bridge to developing local OEM capabilities, METI wants to partner closely with OEMs developing variants of existing aircraft, as well as on new single-aisle development programmes.
Moreover, METI sees international collaboration as a way to spread risk, particularly given the technical challenges of creating a new aircraft. ICAO’s goal of ‘net zero’ carbon emissions by 2050 adds additional challenges to what will already be a major undertaking.
Richard Aboulafia, managing director at AeroDynamic Advisory, raises concerns about the timing of Japan’s plans.
“The emerging consensus is that there will be at least another generation of relatively conventional jets, arriving in the 2030s,” he says.
“They might have advanced engines, like propfans, or other very high-bypass fans, but they won’t be hybrid/electric or hydrogen. Thus, the result of this industrial plan might just be that Japan skips a generation, which would be very damaging to its industry.”
He also warns that the next generation of propulsion has yet to be determined, suggesting that Japan could go down a rabbit hole if it makes the wrong decision. METI appears to be leaning towards hydrogen as a fuel source, in line with the broader hydrogen agenda of the Japanese government.
Aboulafia’s colleague, Martha Newbauer, notes that Japan is motivated to focus on hydrogen because of the country’s lack of oil and quest for energy independence.
“Even if Japan fully hydrogen-ized its economy, this does not mean there will be a global market for hydrogen aircraft, which would be necessary to make a hydrogen aircraft programme successful,” says Newbauer.
METI, for its part, makes no mention about the size of the prospective airliner. Will it have another go at the regional jet market, or attempt to take on Airbus and Boeing in the ruthless narrowbody segment? Japan has already failed in the regional jet space, and the fate of the Bombardier CSeries shows the perils of fighting the duopoly in the narrowbody kill zone.
Another challenge will be building a coalition of like-minded companies for a major airliner programme. Japan’s aerospace sector has extensive experience working with Boeing on major programmes, but it is unlikely that the US airframer would follow the lead of a Japanese OEM for something as important as a new narrowbody.
Airbus is also likely out of the question for a Japan-led programme. While Embraer would be a good fit, the Brazilian airframer is used to leading its own programmes.
One tantalising possibility is South Korea. Seoul, which has a vibrant military aircraft industry, has previously flirted with the idea of developing a turboprop airliner. Japan and South Korea’s proximity would also ease the movement of people and material between locations.
That said, Japan and South Korea have a sometimes-fraught relationship owing to Tokyo’s history of conquest in the 19th and 20th centuries. South Korea also takes tremendous pride in its industrial capabilities: it will want a prominent, if not leading, position on any joint programme.
Yet, for Japan to break away from being a mere Tier One supplier, big bets about partners and technology will be necessary.
The fateful decision to move forward with SpaceJet was made in a simpler era during which the US regional jet market was performing well and before the clarion call of decarbonisation gripped the industry. Yet despite producing what was, by all accounts, a superb aircraft, Japan’s attempt at becoming an OEM died amid the complexities of certification and obscure USA union rules.
The ghost of SpaceJet’s failure will haunt Japan as it gropes towards defining a new airliner. Yet, from METI’s perspective at least, it will take a big, challenging programme to secure Japan’s aerospace future.
