Japanese Air Self Defense Force (JASDF) F-15Js -- could they help Boeing's fighter jets business take off again? Image source: SSgt. James R. Ferguson for the U.S. Air Force.

Hope springs eternal for Boeing (BA -1.39%) investors -- and this time, all hopes hinge on Japan.

It was only a week ago that we last wrote about the on-again, off-again funeral arrangements for Boeing's defense business, as the company began making plans to cease manufacturing fighter jets, and pivot its business toward maintaining and upgrading fighters already in service. No sooner had we described Boeing's exit strategy, however, and we received word of yet another possible way for Boeing to keep its fighter jet production lines humming.

$40 billion from Japan

As reported in Engineering & Technology Magazine, the government of Japan is gearing up to hold a $40 billion tender for defense contractors interested in rebuilding its air forces. Japan needs to build about 100 new warplanes, says E&T, to replace its aging Mitsubishi F-2 multi-role fighters. And right now, three firms are believed to be interested in bidding on the work:

  • Mitsubishi Heavy Industries, the incumbent provider and the company that just unveiled a stealth fighter prototype back in April;
  • Lockheed Martin, expected to offer its F-35 Lightning II stealth fighter -- of which Japan has already ordered 42 units -- and Mitsubishi's partner in producing the F-2; and
  • Boeing.

What will Boeing bid?

Details on Japan's fighter refresh (dubbed the F-3 program) are sketchy at this time, and probably won't be firmed up for quite some time to come. According to E&T, Japan does not expect to make any decision on awarding a contract before 2018, and doesn't expect to actually begin acquiring its new fighter jets before the end of the 2020s at the earliest.

Nevertheless, if Boeing does bid on this contract, it would probably bid some variant of its F-15 Eagle fighter jet. Japan already operates one version of the plane, the F-15J, and Boeing already has a contract to upgrade those jets. Plus, Boeing put a lot of work into developing an even more modern variant of the F-15, dubbed the F-15SE, for a contract bid (that it lost to Lockheed Martin) in 2013. As such, one presumes that Boeing could hit the ground running on any competition, simply by tweaking its designs for the F-15SE.

Can Boeing win?

This still doesn't guarantee Boeing the F-3 contract, of course. In fact, given Japan's clear fondness for Lockheed Martin's F-35, its high-profile unveiling of Mitsubishi's first stealth jet earlier this year, and Lockheed's role in producing the original F-2, I'd say Boeing actually faces some pretty stiff competition for this contract -- and this is before we even see if Eurofighter or Saab will make bids.

And even that isn't the biggest obstacle Boeing faces in winning F-3. The real problem, as I see it, is that Boeing is still expected to run out of F-15 orders from other customers by 2019. That means that even if all goes according to plan and Japan awards an F-3 contract in 2018 and Boeing wins the contract, there's a huge decade-long gap between the last F-15 Boeing builds for someone else and the first F-15 it would be expected to deliver to Japan at the end of the 2020s.

How will Boeing bridge that gap? Would it mothball its F-15 plants for 10 years, only to restart them when Japan is ready to begin retiring its F-2s? Or could Boeing find other buyers to keep its F-15 production lines running until Japan is ready to begin buying, or perhaps convince the Japanese to accelerate their purchase decision by a few years?

It's definitely a problem for Boeing. But with $40 billion up for grabs, if Boeing somehow manages to win the F-3 contract, it will be a nice problem to have.