Four Japanese sources stated Japan, Britain, and Italy would base their next-generation fighter program in Britain, putting London at the forefront of a collaboration that might expand.

After Britain and Japan agreed to consolidate their fighter operations in December, the three countries formed the Global Combat Air Programme (GCAP) to deploy an upgraded aircraft by mid-decade.
Three people familiar with internal deliberations said Japan and Britain will dominate design and production. London’s richer and more recent jet fighter development experience will likely give it a key role in program organization.

One source added, “The headquarters will be in Britain, but for the sake of balance, someone from Japan could head it,” due to the matter’s sensitivity.

“Discussion about the headquarters is ongoing and we are unable to comment on the location,” Japan’s defense procurement agency emailed. It added that the fighter’s development structure would be formed next fiscal year.

“No final decisions have been made on the locations and we will not comment on speculation,” a British defense ministry official said.

Italian defense ministry officials declined to comment.

The Italian government denied Reuters’ March story that it would pay a fifth of the development cost as “speculative.”

OTHER NATIONS

The Financial Times reported last month that Saudi Arabia was interested in joining the initiative, but Leonardo (LDOF.MI)’s head said Friday that it would not.

The three individuals said GCAP may welcome the country in a restricted capacity because it would provide money and a profitable market for a tens of billion-dollar investment.

The United Arab Emirates, a Middle Eastern neighbor, is also interested, they said.

At London’s DSEI weapons expo last week, Richard Berthon, head of Future Combat Air at Britain’s Ministry of Defence, claimed there had been discussions with Saudi Arabia but no decision.

“It was made clear in London that it could possibly come in at a later date,” an Italian defense ministry source said, declining to be identified because they cannot speak to the media.

British GCAP leader BAE Systems PLC (BAES.L) is joined by Japanese Mitsubishi Heavy Industries (7011.T).

Mitsubishi Electric Corp (6503.T) and European missile maker MBDA will join the project. Engine work will be done by Rolls-Royce PLC (RROYC.UL), IHI Corp (7013.T), and Avio Aero.