The government has decided to play a leading role in the domestic development of a next-generation passenger jet, aiming to put one into practical use in about 2030.
Beginning in the research and development stage, the government will play a key role in the production of main parts, including a jet engine that would be difficult for Japanese companies to develop and manufacture.
By sharing technology with Japanese manufacturers, the government aims to develop a "made-in-Japan" plane with about 70 per cent of its parts domestically produced.
The government plans to set up a liaison council of related ministries and agencies by the end of this year and earmark money in its fiscal 2015 initial budget request for equipment to test main parts.
The government envisions the next-generation passenger jet will be a small plane with no more than 230 passenger seats, as members of the global aircraft manufacturing industry predict that demand for such small planes will significantly increase, mainly among Asian countries.
Japan's development of passenger planes has remained static since the development of the YS-11, a turboprop plane that was the nation's first domestically made aircraft since the end of World War II.
After a hiatus of about 50 years, the Mitsubishi Regional Jet (MRJ) is currently being developed as a domestically produced passenger jet.
The goal is to put it into practical use in 2017.
The next-generation model that the government aims to develop is regarded as the successor to MRJ planes.
Efforts were made, led by the private sector, to develop an MRJ engine in Japan, but ultimately foreign-made engines were used.
As of July this year, orders had been placed for 375 MRJ planes. However, only about 20 per cent of the 1 million parts used in an MRJ are domestically made. "It's a foreign plane beneath the surface," a source in the aircraft industry said.
Some in the government have voiced regret about this situation.
"Concerning the development of aircraft parts, there was a limit to what we can achieve if we leave the job in the hands of private companies without much expertise," one said.
The government aims to secure funds in its fiscal 2015 budget to achieve progress in such areas as making a lighter jet engine and developing aircraft bodies with less air resistance.
Specifically, the government will develop devices and equipment for testing a new engine and checking the air resistance of a next-generation plane at facilities of the Japan Aerospace Exploration Agency (JAXA).
The government wants to develop engines and aircraft bodies with better fuel efficiency and noise reduction than those of the MRJ planes.
The government will encourage Japanese manufacturers, including small and midsize firms, to join the development project so as many companies as possible will benefit.
The liaison council of ministries and agencies will comprise director general-class officials from five ministries. They are the Education, Culture, Sports, Science and Technology Ministry; the Economy, Trade and Industry Ministry; the Foreign Ministry; the Defence Ministry; and the Land, Infrastructure, Transport and Tourism Ministry.
The ministries will assist the project from the development stage through manufacturing and sales.
For example, the technology ministry will be in charge of technological development, the economy ministry will handle assistance for small and midsize companies' participation, and the Foreign Ministry will be in charge of assistance for exports.
Industry experts forecast that the size of the global aircraft market, which is currently about ¥25 trillion(S$300 million), will grow to about ¥50 trillion by the 2030s.
In tandem with the diversification of air routes, demand is particularly expected to rise for small and midsize planes, doubling from about 13,000 planes currently to about 26,000 planes by the 2030s.
Japan's market share in the industry is now about 4 per cent, or about ¥1 trillion.
The government plans to set a target to raise that share to about 20 per cent, or about ¥10 trillion, by the 2030s.
The targeted percentage is equivalent to the global market share held by Japan's automobile industry.