Airbus, BAE explore GCAP role as Germany weighs fighter jet partnership

Traders Union
All News
Business & Wealth
Companies
Airbus, BAE & GCAP talks

Highlights

Airbus and BAE will meet to explore Airbus's potential participation in the Global Combat Air Programme (GCAP) with Italy and Japan after Germany's FCAS project collapses.
Any German entry into GCAP would require complicated renegotiation of existing workshare agreements, with Airbus demanding a key industrial role beyond minor manufacturing.
The UK, Italy, and Japan prioritize keeping their supersonic jet timeline for 2035 unchanged, while Germany also weighs a potentially simpler alternative partnership with Sweden's Saab.

Talks focus on GCAP access and future combat air work

As first reported by Financial Times, Airbus executives will meet BAE counterparts to examine how the pan-European group could participate in future combat air projects, including the Global Combat Air Programme with partners from Italy and Japan. People familiar with the plans say the discussions also cover broader collaboration areas and remain exploratory for now.

The meeting comes shortly after Prime Minister Andy Burnham says the UK is open to Germany joining GCAP. Berlin has been looking for alternatives since its rival FCAS project with France and Spain collapses in the summer after an industrial dispute between Airbus and Dassault Aviation.

An earlier idea for a German-led alternative involving Airbus, Spanish partner Indra and other industrial groups is dropped, leaving Germany to consider either entering GCAP or pursuing a separate alliance with Sweden's Saab. Any Airbus or Indra entry into GCAP could prove complex because BAE, Leonardo and Mitsubishi Heavy Industries have already agreed key workshare arrangements and intellectual property ownership.

Industrial hurdles shape Germany's options

The UK, Italy and Japan are also making clear they do not want any change that slows their plan to field a supersonic jet by 2035. One British official says the programme is moving ahead and that the UK message to German Chancellor Friedrich Merz is to begin discussions if Berlin is interested.

For GCAP, German participation could bring additional funding and future orders, but Airbus is seeking a substantial industrial role. Mike Schoellhorn, head of Airbus Defence and Space, says in an interview with Handelsblatt this month that Airbus would insist on a "key role" and would not accept a minor manufacturing contribution, a position German officials also support as they push for a fair workshare that includes companies such as MTU Aero Engines.

Airbus and BAE are also expected to discuss other co-operation areas, including autonomous collaborative combat aircraft and the combat cloud, the software architecture linking aircraft with sensors, radars, drones and satellites. Sweden remains Germany's other main option, with Saab offering a potentially simpler fighter partnership, although Sweden faces no immediate pressure to choose a successor to the Gripen, which is expected to remain in service until 2060.

Airbus declines to comment and points to Schoellhorn's recent remarks. BAE describes the upcoming meeting with Airbus as routine and declines further comment.

Our earlier article covered Mario Draghi’s warning that aggressive debt control and inflation fighting can end up suppressing the long-term investment needed for resilient growth. He argued central banks should keep rate paths as low as possible while meeting price-stability goals, and pointed to EU-level market integration and targeted industrial policy—such as a proposed €100bn common-budget allocation—to support productivity-boosting investment.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.