Japan prepares to back industry bids for revenue-sharing

Japan is preparing to provide loans to three of its engine manufacturers to help cover development costs for their share of the General Electric GEnx and Rolls-Royce Trent 1000 engines for the Boeing 7E7.

GE has already forged in-principle revenue-sharing agreements with Ishikawajima-Harima Heavy Industries (IHI) and Mitsubishi Heavy Industries (MHI) for a combined 15% workshare in the GEnx.

The Japanese team, to be represented by the Japanese Aero Engines (JAEC) consortium, will supply most of the low-pressure turbine and parts of the compressor. Italy's Avio has also secured a workshare of about 12%, covering gearboxes and part of the low-pressure turbine, and France's Snecma is believed to be the front-runner to supply the high-pressure compressor.

Industry sources say Rolls-Royce is close to completing similar revenue-sharing agreements for the Trent 1000 with Japan's Kawasaki Heavy Industries (KHI) and MHI. KHI is poised to receive a 10% share and MHI a 5% share, but it is unclear which components they will supply.

For several months, KHI, MHI, IHI and JAEC  have sought backing from Japan's Ministry of Economy, Trade and Industry (METI) for their potential work in 7E7 engines (Flight International, 27 January-2 February). Sources say METI, as part of its recently completed fiscal 2005 budget proposal, has decided to back both engine programmes from 1 April 2005.

The programmes, pending approval by higher levels of government, are therefore poised to become national engine projects, joining the General Electric CF34 and International Aero Engines V2500. JAEC has a 30% share in the CF34-8/10 and a 23% workshare in the V2500, but sources say the support policy for the GEnx and Trent 1000 will not be finalised for several months.

JAEC's board is not expected to approve the programmes until March. IHI, which has a majority share in both existing JAEC programmes, says it has requested a loan from METI to cover its share of GEnx development.

Tokyo is also deciding on a loan scheme for KHI, MHI and Fuji Heavy Industries to cover their share of development costs for the 7E7 airframe. METI, starting with the fiscal 2004 budget, has given Japan's 35% share in the airframe national project status.




Source: Flight International