An Update on European Defense Industrial Cooperation: December 2021


By Pierre Tran

Paris – Airbus Defence and Space and Dassault Aviation are still in detailed talks for a development contract for a next generation fighter, a key element in a planned European future combat air system, said Michael Schoellhorn, chief executive of the Airbus unit.

“Some points still need to be tackled,” he said Nov. 30 in a virtual briefing for the trade press held by Airbus Defence and Space. “There (are) many things in the detail that need to be sorted out.”

Dassault is prime contractor for the planned European fighter, and the plan is to fly a technology demonstrator in 2027.

“It is a complex coming together of two successful companies for a program which will be significant in the coming decades,” he said. “So we have all agreed to do due diligence and invest the time that it takes to really come to the conclusion that we need.”

Dassault Aviation declined comment.

The head of the French procurement office, Joël Barre, told Oct. 14 parliamentarians that contracts were expected to be signed in the middle of November on the new fighter, with Dassault having held “difficult negotiations” with Airbus German and Spanish units.

“We should manage this difficulty in the next few weeks, to get in mid-November a signing of the DGA (Direction Général pour l’Armement) contract and related contracts for prime contractors and their main partners,” he said.

Airbus DS and Dassault have been negotiating on FCAS all this year, seeking agreement on intellectual property rights and work share on the new fighter.

Airbus units in Spain and Germany stand to win two thirds of the workload, leaving Dassault the remaining third, with the latter claiming leadership of certain key work packages.

Airbus DS has been keen to gain access to valuable “background” information on the Mirage and Rafale, as those Dassault fighter jets would help Airbus engineers understand the “foreground” technology of the new fighter.

Dassault has objected to that access, seen as handing over core knowledge of how to design and build a fighter.

Agreement is needed to sign contracts to launch work for phases 1b and 2 on a  demonstrator to fly in 2027, with a budget reported to be worth some €3.5 billion ($4 billion), funded by partner nations France, Germany and Spain.

The new fighter is due to enter service in 2040, an eventual successor to the Eurofighter flown by the German air force, and Rafale flown by the French air force and navy.

Eurofighter will be a “bridge” to FCAS, Schoellhorn said, and planned upgrades will allow the present combat jet to fly to 2060.

Stable Management Outlook

Schoellhorn pointed up the perceived importance of FCAS for Europe, showing a continuity with his predecessor, Dirk Hoke, who left Airbus DS July 1.

The FCAS was not just a great air force project, Schoellhorn said, adding that it touched on a subject close to his heart, namely European sovereignty. There was the economic impact of tens of thousands of jobs, and an ability not to rely on the supply chain from other parts of the world, he added.

“We have it in our hands to have what Europe needs, going forward,” he said. There was a European ability to determine foreign and security policy, which hinged on projects such as FCAS.

“If we want to protect our ability to defend our way of life — European way of life — the way the free West and allied nations live, we must not take these things for granted,” he said.

“This is why there is such importance given to FCAS.”

Those corporate remarks are in line with the French political pursuit of greater European independence in foreign and military policy, with the French head of state Emmanuel Macron taking up Jan. 1 the rotating six-month presidency of the European Union.

The perceived political and industrial importance of FCAS can be seen in the light of European interest in the Lockheed Martin F-35 joint strike fighter.

The defense forces of Finland have recommended acquisition of the F-35, with a government decision expected in some 10 days’ time, Reuters news agency reported Dec. 6, drawing on Iltalehti, a local media outlet.

If that recommendation were endorsed, the F-35 will beat competing offers of Boeing F-18, Eurofighter Typhoon, Rafale, and Saab Gripen. Finland has reportedly earmarked €10 billion for its HX fighter program to replace a 64-strong fleet of F/A-18 C/D Hornets.

Macron promotes the concept of European sovereignty, and it was he and the then German chancellor Angela Merkel who announced in 2017 a project for a European new fighter. Spain later joined the project.

That three-nation group stands distinct from the Tempest new fighter jet led by the UK, partnered by Italy and Sweden.

A chaotic evacuation out of Kabul due to a sudden U.S. withdrawal from Afghanistan prompted some EU nations to consider a sharper focus on European foreign and defense policy.

However, Hungary and Poland, being closer to Russia, pursue close ties with Washington.

Meanwhile, Ukraine has called on NATO to accept its application to join the transatlantic alliance, amid concern over Russian forces perceived to be massing on the common border.

Russia has denied talk of a planned invasion and called on NATO to refrain from expanding into the East.

NATO has stationed four multinational battalion-sized battle groups to protect Poland and the Baltic nations of Estonia, Latvia and Lithuania.

Eurofighter as Bridge to FCAS

On a German order last year for 38 Eurofighters, dubbed the Quadriga project, Airbus will keep its production line open into 2030, and will extend its operational life to 2060, Kurt Rossner, head of combat aircraft systems, said.

That extension will call for upgrades in capability, including weapons, and flying in manned and unmanned teams with remote carriers, he said. The German air force flew Eurofighters with two remote carriers, or unmanned aerial vehicles, in the Timber Express 2021 exercise.

Technology for the Quadriga tranche of Eurofighters will be critical to development of FCAS, with a roadmap which includes avionics, onboard  computing power, man/machine interface in the cockpit, and a helmet. There will be Quadriga work on new weapons, aerodynamics, and electronically scanned radar.

The French equivalent of Quadriga for FCAS would be development of the F4 version of the Rafale, effectively a test bed for the new generation fighter.

Asked about reports of Spain showing interest in acquiring the F-35, Rossner said he would be surprised if there were no such interest, adding that the Eurofighter would be the right choice.

Drone Awaits Spanish Approval

On a contract for a planned medium-altitude, long-endurance unmanned aerial vehicle, industry is waiting for the Spanish parliament to grant approval for the program, Daniela Lohwasser, chief engineer on the drone project, said.

France, Germany and Italy have given the green light and it remains for Spain to complete the “national process,” she said, then it would take a couple of months as the OCCAR joint procurement agency prepared contracts to sign.

Airbus DS declined to confirm whether a budget of some €7 billion has been agreed on the drone project.

After the contract is signed, Airbus DS will announce the engine supplier.

French parliamentarian Jean-Charles Larsonneur said June 15 his colleagues in the French senate had correctly raised concerns on the excessive budget of some €7 billion on the drone and that there was a choice of engine.

The anxiety over the drone engine stems from the search for European sovereignty, as there are those seek a pick of Safran Helicopter Engines, seen as a wholly European supplier, over a rival offer from Italian manufacturer Avio, pitching a motor from a U.S. giant, General Electric.

The push for European sovereignty on the drone, dubbed unofficially as Eurodrone, won some recognition with the July 15 signing of a €100 million grant for work on the UAV from the European Defence Industrial Development Programme, under the European Defence Fund set up by the European Union.

There is a planned total order of 20 UAV systems, with each system comprising three aircraft and two ground stations.

The drone would also fit into the FCAS program, Lohwasser said.

Boost A400M Availability

On the A400M, Airbus DS needed to win trust from customers, with greater availability of the transport aircraft, Schoellhorn said.

The French defense ministry failed to disclose any financial information on the retrofit on early batches of A400M, parliamentarian François Cornut-Gentille said Oct. 8 2020 in a detailed parliamentary report.

“However, availability of the aircraft remains a problem,” he said.

The retrofit was needed because those aircraft failed to meet tactical capabilities in the contract, but had been shipped as Airbus DS was late in delivery.

The parliamentary report shows in 2019 there was availability of 24.5 percent of the then 16-strong fleet of A400M flown by the French air force.

Airbus DS saw the Kabul crisis as a redeeming operational moment, with 25 A400M flown by seven nations to evacuate thousands of refugees, in an event which grabbed front pages and television news around the world.

Air forces from five nations and NATO also flew nine A330 multirole transport and tanker aircraft to airlift civilians out of the strife-ridden capital.

That was the highlight of 2021, said Jean-Brice Dumont, head of military aircraft.

Airbus has teamed with Lockheed Martin to pitch an adapted A330 MRTT in the U.S. tender for an inflight refueling fleet.

A Good Year

Overall, 2021 looked like a good year for Airbus DS, Schoellhorn said, with a “slight uptake” on sales compared to last year. There had been excellent order intake, cost containment, and “it does not too bad looking forward,” he added.

There were still challenges ahead, he said, but the fourth quarter showed major contract wins for transport aircraft from India, Indonesia, and Kazakhstan. There were still “irons in the fire,” he said.

The Kabul evacuation was “a turning point” in a reputation which had previously been tainted due to problems in developing the A-400 M aircraft, he said. There was a milestone in maturity with the aircraft clearing New Standard Operating Clearance 2.5. Airbus DS was pressing ahead on retrofit and availability.

Russia, after the attacks on Ukraine and Crimea, was undertaking massive rearmament, including nuclear weapons, and launching cyber and hybrid attacks, he said. There were streams of refugees on EU borders, and there was  confrontation with China.

Such events had a “huge impact” on business, he said.