Doubts grow over the future of the Franco-German FCAS fighter jet project

Doubts are growing at Airbus and within German politics regarding the development of the new Franco-German European fighter jet, the “Future Combat Air System” (FCAS).

Airbus’s defense subsidiary, the Germany-based aircraft manufacturer expected to lead Europe’s largest defense project, and the French aircraft manufacturer Dassault have so far failed to reach an agreement.

Michael Schöllhorn, head of Airbus’s defense division, told Handelsblatt, “Germany and Europe need a next-generation air combat system, and Airbus is ready to develop such a system.”

Thomas Röwekamp, chairman of the CDU’s Bundestag defense committee, stated that “they cannot give up on this important technology, neither from a military nor an industrial policy perspective.”

However, negotiations between Airbus and Dassault have been stalled for months. This situation is already causing discontent among employees.

Airbus to the French: There are other attractive partnerships

Thomas Pretzl, chairman of the Airbus Defence and Space works council, told Handelsblatt that employees in Germany want clarity and that a decision on how to proceed with FCAS must be made soon.

For instance, Pretzl believes FCAS could continue without Dassault, saying, “Partnership is based on cooperation, not competition. There are more attractive and suitable partners in Europe.”

FCAS is planned to be a combination of fighter jets, unmanned aerial vehicles, and a data platform. The system aims not only to protect European airspace but also to free the continent from its technological dependence on America.

Development costs alone are expected to reach tens of billions of euros, but the system will not be operational before 2040. Critics argue this is too late and too expensive.

French Dassault wants the lion’s share of the profit

During his visit to Spain last Thursday, German Chancellor Friedrich Merz complained, “We are making no progress on this project. Things cannot continue as they are.”

Efforts will be made to find a solution by the end of the year “so that this project can truly be realized,” and according to industry sources, a decision could be made as early as October.

Spain is the third partner in the FCAS alliance, alongside France and Germany. The contracts stipulate that German and Spanish industries will receive more than half of the project’s added value.

Dassault is said to have recently demanded 80% of the added value for the aircraft, the main component of FCAS. Although Dassault denies this figure, CEO Eric Trappier reaffirms his company’s leading role in the aircraft’s development.

Merz and French President Emmanuel Macron had tasked their defense ministers with finding a solution to the deadlocked dispute. Ultimately, FCAS is also intended to be a symbol of effective European cooperation, similar to what Airbus achieved in civil aircraft production.

The fragile political situation in France has increased budget uncertainty

But the complex joint venture structure between the German Airbus divisions and the rival Dassault Group continues to fuel competition and mistrust.

In recent months, both sides have tended to drift apart. Additionally, France is politically paralyzed. Former French Defense Minister Sébastien Lecornu was appointed as the new French prime minister on September 9, but he has neither a majority in parliament nor a budget.

According to the project plan, a multi-billion-dollar development contract with a fixed industrial workshare must be approved this year to advance FCAS.

Meanwhile, an increasing number of European countries are purchasing the F-35 from the US company Lockheed Martin, which possesses stealth capabilities and superior digital features. Germany has also ordered three dozen F-35s, which can be equipped with American nuclear bombs in emergencies.

However, a disadvantage of the F-35s is that only the US has full control over the aircraft’s software. Another drawback is that Europe’s arms spending flows to US industry.

Germany sets its sights on the British-Italian-Japanese fighter jet project

On the other hand, other projects are underway in Europe. The “Global Combat Air Programme” (GCAP) is a joint project of BAE Systems from the UK, Leonardo from Italy, and Mitsubishi from Japan.

The intensive development phase for GCAP has not yet begun. However, at the DSEI defense fair in London in September, the three GCAP partners emphasized their willingness to accept other companies and partner countries.

The more partners there are, the lower the costs per country.

Experts advise Airbus to change course. Aviation expert Michael Santo says, “If the FCAS project continues to develop at its current pace, we will have an obsolete system by 2050. The French are setting a benchmark by demanding 80% of the project. The Germans seem bewildered and refer to the contracts.”

Arguing that it would be “economically irresponsible” to proceed with confidence in FCAS’s future, Santo claims, “Airbus Defence needs a strong partner, and BAE would not be a bad choice.”

Competition with Rafale unsettles the Germans

A partnership with British and Italian industry is possible. Airbus, BAE Systems, and Leonardo jointly build the Eurofighter. French industry withdrew from the project in the 1990s and developed the Rafale. Since then, the Eurofighter and Rafale have been competitors in the global market. This is another reason for the significant mistrust between Airbus and Dassault.

With BAE Systems and Leonardo, Airbus could benefit from established processes from Eurofighter production. The disadvantage here is that Airbus and German industry would be joining the consortium relatively late.

In fact, Germany has more financial leeway than the UK and Italy, as the debt brake for defense projects has been largely lifted. Works council chairman Pretzl says it is also possible to work with other partners in Europe, adding, “Theoretically, we could also develop our own fighter jet in Germany.”

A partnership with Saab is also possible

An independent development in Germany seems unlikely. Therefore, the option of the Swedish company Saab is also being discussed within German industry.

Saab produces the Gripen, a fighter jet comparable to the Eurofighter, which has also been delivered to South Africa, Brazil, and Thailand.

Germany has many connections to this project, and relations are considered excellent. Sweden has been a NATO member since 2024 and, like Germany, is significantly increasing its defense spending.

For example, the Airbus subsidiary MBDA supplies guided missiles for the Gripen’s armament. In March, the Swedish government announced it would also upgrade the Gripen for the latest version of the Taurus cruise missile.

In June, Helsing, a Munich-based defense startup specializing in artificial intelligence (AI), tested an air combat AI agent called Centaur on the Gripen.

This forms the basis of a future joint air combat system. Furthermore, since the Eurofighter and Gripen were developed in the 1990s, their updates and the introduction of a possible successor could be synchronized.

On Tuesday, Defense Minister Boris Pistorius will meet with his Swedish counterpart, Pal Jonson. According to Bloomberg, one of the topics on the agenda will be the modernization of the Eurofighter with Saab technology.

Dependence on Eurofighters may continue a while longer

The German Armed Forces’ modernized Eurofighters could operate with larger unmanned aerial vehicles, similar to the FCAS concept.

Airbus has formed a partnership with the US supplier Kratos and plans to begin deliveries to the German Armed Forces from 2029.

In addition, the Eurofighter may remain in production longer than previously thought. Spain and Italy have ordered new aircraft, and Germany intends to order at least 20 more in October. There are also export demands from Saudi Arabia, Qatar, and Turkey.

Airbus defense chief Schöllhorn says, “In the past, we struggled to maintain the necessary production rate of ten aircraft per year. Now, we are doubling this rate as we expect new orders.”

Berlin does not want to end the partnership with Paris immediately

New Eurofighter orders and strong business related to tanker and reconnaissance aircraft provide Airbus Defence with new room for maneuver. Losses in the satellite business recently forced Schöllhorn to cut 2,500 of approximately 33,000 jobs worldwide. A new dynamic could develop with new Eurofighter orders and a new FCAS launch.

But German politicians are not yet ready to write off the Franco-German FCAS system. CDU politician Röwekamp says, “It is not technical limitations that are currently slowing down the project, but national industrial interests.”

He expects the political issues regarding the program’s further development to be clarified by the end of the year at the latest, stating, “Our security policy objective should not fail due to trivial industrial policy issues.”