Industry Partners agree to form a new joint venture to deliver the GCAP next generation combat aircraft

The Global Combat Air Programme (GCAP) is a hugely significant programme for both the security and economic prosperity of the national partners. Rapid progress is being made in the programme, with the approval of the GIGO treaty by all three parliaments of the participating nations on 21 November, and with the agreement to form a new joint venture to design, develop and deliver the GCAP aircraft on 13 December. The partners are now “working the concepts in response to the requirements” and are moving forward towards the next major engineering review point, which is a systems requirements review.

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On 13 December 2024, the industry partners in the Global Combat Air Programme (GCAP)  announced that the three national partners have reached an agreement to form a new joint venture company to design, develop and deliver the GCAP aircraft, subject to regulatory approvals. Once that approval has been granted, the joint venture can receive a design and development contract from the GCAP International Government Organisation (GIGO). This is expected towards the end of next year.

At the ceremony marking the agreement, the heads of the three partner companies greeted the achievement of what is clearly seen as an historic milestone. Charles Woodburn, BAE Systems Chief Executive, said: “Today’s agreement is a culmination of many months working together with our industry partners and is testament to the hard work of everyone involved in this strategically important programme.

“The new business will bring together the significant strengths and expertise of the companies involved to create an innovative organisation that will lead the way in developing a next generation combat air system, creating long-term, high value and skilled jobs across the partner nations for decades to come.”

Roberto Cingolani, Leonardo Chief Executive Officer and General Manager, said: “This agreement is the result of an intensive journey made possible by pooling our mutual and shared experiences. This partnership not only enhances our technological capabilities but also reinforces our commitment to global security and innovation. Today, we are paving the way for the development of a new era in Aircraft Systems and Multi-domain scenarios, fostering long-term sustainable growth for the economies of the involved countries.”

Kimito Nakae, President of JAIEC said: “As we now embark upon the exciting and important journey towards the success of GCAP, I acknowledge that the way might not always be simple and straightforward. However, I believe that through continuing the strong spirit of trilateral cooperation and collaboration that we have fostered up to this point, we will not only deliver the GCAP on time but also at a level that exceeds all of our expectations.”

The Joint Venture company remains unnamed, though an “iconic name” will soon be announced, according to Herman Claesen, Managing Director FCAS at BAE Systems.

The process of creating the joint venture has been rapid, Claesen says. “We got them to that point after about 18 months of intense negotiations, whereas on Typhoon, it took at least twice as long to get to that point. This programme continues to move at an incredibly fast pace to make sure we can hit 2035 in service, date, which continues to be the target date.”

Claesen believes that it is not just pace that differentiates GCAP from previous collaborative programmes. “We want to be more programme focused, more capability focused. Therefore, this setup and what we’re doing here is a significant evolution of what we’ve done in the past to create a successful program, to be successful in the export market, and to give an agile combat capability to our air forces in recognition of the threats that we’ll be facing. And that’s what the programme is geared up to do.”

The three national industrial partners are BAE Systems (UK), Leonardo (Italy), and Japan Aircraft Industrial Enhancement Co Ltd (JAIEC), each of which will have a 33.3% shareholding in the new joint venture. Great efforts are being made to share senior positions (which will be rotated between the nations, as will seats on the non-executive supervisory board). Workshare is also being divided fairly between the three partners, and efforts have been made to avoid there being a ‘senior partner’.  Claesen said that workshare for the design and development phase has already been divided up, and that production and final assembly workshare is now being looked at.

Design, development, manufacturing and production elements will be evenly distributed among the three nations, and the new joint venture will have operations and joint teams working in each of the partner nations. What this means is that even if the hydraulics systems are (say) a Japanese responsibility under the workshare agreement, there is scope for British or Italian engineers to be sent to Japan as JV employees and to thereby sustain hydraulic design capabilities for the UK or Italy.

Every effort is being made to closely integrate the individual partner companies and the joint venture, as Claesen said: “So when a JV employee walks into the headquarters or when they walk into one of the divisions in the three geographical locations, it will feel exactly the same. People will be on the same employment contracts. They will wear the same lanyards, share the same vision, be part of the same company. It will feel like one entity in those four geographical locations. And we felt that was really important to underpin the success of that of the programme.”

The first chief executive of the GIGO’s GCAP Agency will be from Japan, and the Japanese government nominee Mr.Oka Masami has now been appointed as the GCAP Agency Chief Executive.

The first CEO of the joint venture will be from Italy, but the organisation will be headquartered in the UK, co-located with the GIGO (as NETMA was with Panavia and Eurofighter GmbH) to ensure maximum alignment and collaboration with the GCAP International Government Organisation (GIGO). It is understood that both organisations will thus be headquartered in Reading, Berkshire, in the UK, though BAE Systems refused to confirm this.  Both entities will work together to support cost-effective and timely programme delivery, including an extremely ambitious 2035 aircraft in-service date.

This new entity will undertake the design and development of the GCAP aircraft, and will be responsible for delivery of the next generation combat aircraft programme. The new joint venture will remain the design authority for GCAP for the life of the product, which is expected to last until 2070 and beyond.

It will also subcontract the manufacturing and final assembly of the aircraft to BAE Systems, Leonardo, Mitsubishi Heavy Industries and the wider supply chain. By making the best use of effective knowledge and technology transfer, the new joint venture will help to maximise and grow industrial capability in each of the nations and will evolve and deliver important sovereign combat air capabilities in each partner nation, for generations to come.

Though the core nations of GCAP are the UK, Italy and Japan the programme is open to international partners, and the three governments will determine how and when other partners can join, Claesen says.

The joint venture is expected to be established by the middle of 2025. The partnership believes that the new JV will bring together the combined strengths and expertise of three of the world’s leading defence/aerospace companies and that it marks a pivotal moment for the international aerospace and defence industry. This is perhaps particularly the case for GCAP, which Claesen called “the only credible sixth generation programme out there, outside Russia, China and the US.”

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