Japan is looking to Modify Self-Defense Forces Aircraft for Civilian Use

The Defense Ministry is seriously examining the possibility of adapting Self-Defense Forces aircraft to civilian use, but a great many issues remain to be solved.The ministry is aiming to reduce the procurement cost for military aircraft through mass production and to energize the domestic defense industry, which has been struggling under reduced budgets in recent years. It plans to compile by August the reports of study meetings attended by related corporations, ministries and experts.

"Adapting military aircraft to civilian use would contribute greatly to maintaining and strengthening both the production base and the technological base," Defense Minister Toshimi Kitazawa said at the first study meeting April 23. "It would also help reduce the cost of [military] equipment."It is possible to improve the current situation while still abiding by this country's three principles regarding arms exports, Kitazawa said.

The ministry expects there to be demand for SDF aircraft from overseas, and therefore plans to limit the types of aircraft to be adapted to civilian use to those that do not conflict with the ban on arms exports, according to sources.Specific candidates include the Air Self-Defense Force's XC-2 next-generation transport jet, the Maritime Self-Defense Force's XP-1 next-generation patrol aircraft and its US-2 air-sea rescue amphibian.

The ministry envisions converting XC-2s into cargo planes, XP-1s to passenger planes and US-2s to firefighting or multi-purpose amphibians. These planes also are expected to be utilized in island nations, including the Philippines.The move to promote the adaptation of defense equipment to civilian use, an issue also raised under governments led by the Liberal Democratic Party, was prompted by the increasing number of corporations that have been forced to withdraw from the defense industry due to continually shrinking budgets.

The Democratic Party of Japan-led administration also wants to explore the possibility of converting military aircraft to civilian use because it is difficult to increase the defense budget in the current fiscal climate.The average amount of major military equipment procured annually by the SDF has fallen drastically in the last couple of decades. The number of fighter jets dropped from 18.5 in the nine years from 1977, for example, to 2.8 in the nine years from 1997.

Procurement of escort ships dropped from 2.8 in the nine years from 1977 to 1.1 in the nine years from 1997, and tanks fell from 58.4 to 16.1 over the same period. Annual operation hours at related factories decreased by nearly 10 percent from fiscal 2003 to fiscal 2007.

In contrast, demand for aircraft in the private sector is expected to rise. In the 15 years from 2010, the global market will need about 130 midsized firefighting amphibians, which are expected to be converted from US-2s, and about 230 large cargo planes, such as XC-2s, according to data from industry groups.

Profitability a concern

Conversion of military aircraft to civilian use involves the issue of how much of the profits acquired by selling the aircraft to the private sector should be allocated for recouping the development costs borne by the nation.The combined development cost of the XC-2 and XP-1 was about 345 billion yen, and the development cost of a US-2 was 79 billion yen. Returning this money to the state is a matter of great interest, but some observers say corporations will be unable to make ends meet if the government demands excessive repayment of development costs.

Another problem is to what extent the government will allow corporations to utilize intellectual property, such as aerotechnology and experiment results that were acquired through joint development.Corporations also must deal with the fact that it is very expensive to change an aircraft's specifications from military to civilian. For example, in converting an XP-1 with four engines to a passenger plane, it is necessary to increase its propulsion and convert it to two engines to achieve economic efficiency. It is also necessary to remove military-specific equipment such as self-defense and airdrop systems.The results of the study meetings will draw a lot of attention: Will corporations be able to make enough profit to launch a new business?.........................Source

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