Analysis: Rival warplane projects underline Europe's divisions
By Andrea Shalal FARNBOROUGH, England (Reuters) - Britain's showy launch of a new fighter jet project at this week's Farnborough Airshow has laid bare political tensions that are threatening to tear Europe apart and deepened scepticism about the future of European defence cooperation. The new UK programme - launched with 2 billion pounds ($2.6 billion) of seed money just nine months before Britain leaves the European Union - rivals a Franco-German project begun over a year ago that has yet to be funded. France had hoped to work with Britain on the project, bringing together Europe's two biggest military powers, but turned to Germany after failing to make progress on a Franco-British drone programme.
By Andrea Shalal
FARNBOROUGH, England (Reuters) - Britain's showy launch of a new fighter jet project at this week's Farnborough Airshow has laid bare political tensions that are threatening to tear Europe apart and deepened scepticism about the future of European defence cooperation.
The new UK programme - launched with 2 billion pounds ($2.6 billion) of seed money just nine months before Britain leaves the European Union - rivals a Franco-German project begun over a year ago that has yet to be funded.
France had hoped to work with Britain on the project, bringing together Europe's two biggest military powers, but turned to Germany after failing to make progress on a Franco-British drone programme.
This had got caught up in Britain's political turmoil, with the government not only at odds with the EU over their future relationship - casting doubt over defence and security cooperation - but also at war with itself. The junior minister responsible for defence procurement became the latest government official to resign this week over Brexit negotiating strategy.
Impatient industry executives say Europe must move quickly, setting aside national employment interests and political divisions, or risk losing out in a global market to bigger players led by the United States, or even China in the future.
"What we want is new developments, new programmes," Eric Trappier, head of France's Dassault Aviation told Reuters. "Whether we do it with the Germans or ... the British, we need facts."
Dassault and Airbus are leading the Franco-German programme, while the UK project will be run by BAE Systems, Italy's Leonardo, engine maker Rolls-Royce and missile maker MBDA.
Industry executives say the two projects could merge after Brexit, but Britain may also forge new alliances, perhaps with Sweden's Saab, maker of the Gripen fighter jet.
It may also look to Boeing, which lost out to Lockheed Martin on the U.S. F-35 warplane contract in 2001, and has since teamed up with Saab and Brazil's Embraer , said Richard Aboulafia, vice president at Teal Group, a defence and aerospace analysis group.
Boeing's defence chief Leanne Caret said her company would be "thrilled to be part of that journey", but Britain and its partners must first determine their requirements.
Given the huge investment required, Leonardo's chief strategy officer, Giovanni Soccodato said Europe must share out work on sensors, airframe and other parts, instead of building whole jets in four different countries, as done by the Eurofighter, Europe's last big fighter development programme.
"The only way to survive and be economically viable ... is to cooperate and do programmes jointly," he told Reuters. "It's a schizophrenic approach to be pushing for European defence cooperation, but not wanting to give up national capabilities."
European states have historically opted to safeguard high-paying jobs and national security capabilities, resulting in overcapacity in several markets, including fighter jets.
France, for instance, was initially part of the Eurofighter project in the 1980s, but dropped out to build its own rival Rafale warplane. Its industrial demands make it "inconceivable" that the two rival programmes could be joined, said Aboulafia.
However, competitive pressures should force a more pragmatic outcome this time, Airbus Defence chief Dirk Hoke told Reuters. "We cannot afford to continue this fragmentation," he said.
Industry executives familiar with the development of the F-35 - the world's most advanced warplane - caution that European states face a massive bill and extensive technological difficulties to develop a rival aircraft.
"The United States spent about $50 billion to develop the F-35," said former chief Pentagon arms buyer Frank Kendall. "Even if you discount the fact it was three different models, that's an enormous barrier to entry for anybody else."
The British defence ministry earmarked on Monday 2 billion pounds in public funds for the project up to 2025, but is seeking international partners to help foot the larger bill.
To help make the pitch, UK officials gave military officers from allied countries a preview of a mockup of the new aircraft at the Royal International Air Tattoo, the world's largest military air show, days before its public unveiling.
Britain is already in talks with Sweden and Japan, among others, but analysts say the likes of South Korea and Turkey, or arms-buying Gulf nations such as Saudi Arabia, could be options.
The best choice, given China's growing might and Russia's increased military ambitions, would be for Europe to join forces with the United States, said Morten Brandtzaeg, president and chief executive of Norway's Nammo AS aerospace group.
"Europe and the United States together are just a little bit more than one-tenth of the world's population. For the Western world, we need to share technology. Then we would have the economies of scale to meet these new growing economies."
($1 = 0.7666 pounds)
(Reporting by Andrea Shalal; Additional reporting by Tim Hepher and Mike Stone; editing by David Stamp)
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