Japan has earmarked about $25 million in its fiscal 2004 budget to help fund development of the Boeing 7E7 and another $25 million to study the feasibility of an indigenous regional jet.
If approved by the Japanese parliament, the funds will be distributed to Fuji, Kawasaki and Mitsubishi after the new fiscal year begins on 1 April. Parliamentary approval is expected at the end of this month.
Fuji, Kawasaki and Mitsubishi, which were tapped late last year to build 35% of the 7E7 airframe, are also planning to invest about $2.3 billion on 7E7 development over the next several years. Japanese industry sources say the manufacturers were hoping for more than $25 million from the government for the first year of the development phase, but the government is reluctant to provide significant funds before the programme is officially launched.
The government will wait for the manufacturers to complete supplier contracts with Boeing and for launch customers to be signed up before deciding how much money to allocate beyond the initial $25 million.
On 29 December, the Japanese cabinet approved a fiscal 2004 budget that included a total of ¥5.7 billion ($54 million) for commercial aircraft programmes. Japanese industry sources say ¥2.7 billion is allocated specifically for a regional jet feasibility study. A team led by Mitsubishi began work on the project last year. Sources say most of the remaining ¥3 billion is for the 7E7.
The 7E7 funds, which have sparked a protest from Airbus, will eventually have to be repaid by the three manufacturers. The manufacturers also plan to seek loans from commercial banks to help cover some of their estimated ¥240 billion investment.
Source: Flight International
