A NATO Fighter? Airbus Military Chief Says Lockheed, Boeing Partnership Is Worth Considering
Nov. 23, 2014


Airbus Defence and Space executive vice president for military aircraft Domingo Ureña Raso said a partnership with Lockheed or Boeing is worth considering

WASHINGTON — Just imagine it: Airbus teams up with Lockheed Martin or Boeing on a program to build a NATO fighter.

Detached from reality?

Not, apparently, to Domingo Ureña Raso, Airbus Defence and Space executive vice president for military aircraft.

Speaking on a panel at the 2014 NATO Industry Forum in Split, Croatia, on Nov. 13, Raso was discussing the need to collaborate more with industry from various countries on issues such as cybersecurity when he was asked if that meant he would be open to teaming up with Boeing or Lockheed on a new fighter. His response?

“Why not? Why not?”

It may seem surprising, given the historic competition between the European giant and its American cousins. But Raso pointed to the history of cooperation between industry in different nations.

“Industry knows how to cooperate internationally,” he said. “It’s not a threat for us. We can work trans-Atlantic, we can work national … there is not a program that is made only by one company as far as I remember, not one single program made from one company.”

And the truth is that Airbus could benefit greatly from teaming up with an American company on a new fighter.

Europe hosts six active fighter production lines. One in Sweden produces Saab’s Gripen, while another in France produces the Dassault Rafale. The other four are tied to the Eurofighter Typhoon, on which Airbus is a major partner. Both the Rafale and Typhoon, twin-engine heavy fighters that share a market space with Boeing’s F/A-18 Super Hornet, are on pace to end production before 2020.

To Douglas Barrie, senior fellow for military aerospace at the International Institute for Strategic Studies, that means Europe has to start thinking about how — or if — it will stay in the fighter production game.

“The development cycle for a next-gen combat aircraft is about 20 years, give or take,” Barrie said. “If you’re remotely interested in staying in that business, then you’ve got to be thinking in the next few years about how to move ahead. And I’m sure to some extent that’s what spurred that Airbus comment. It must be something senior management on that side are looking at.”

So assuming Airbus is interested in developing another fighter, why would it turn to the US?

One advantage is the nascent efforts by the US Navy and Air Force to develop a “sixth generation” fighter. Both services are laying the groundwork on those programs, with the Air Force aiming to open up Milestone A acquisition activities in early fiscal 2018.

Tying into a US program would make sense for Airbus, since it would provide guaranteed customers and a major stream of funding. The next question is what Airbus brings to the table — and who would make sense as a partner?

Lockheed seems unlikely, if for no other reason than because its F-35 joint strike fighter is still coming online and looks poised to dominate the market for the next 20 years, including in Europe, where the UK, Italy, Norway and the Netherlands have already committed to procuring the jet.

Analyst Byron Callan of Capital Alpha Partners doubts Lockheed would do anything that undercuts F-35 sales in the near term.

“I just think it’s way too soon for them to start shifting into something that will replace the F-35,” he said. “I think there are issues on both sides that would argue against it happening.”

Richard Aboulafia, an analyst with the Teal Group, said Boeing and Airbus share many qualities that could make them compatible partners, including the fact that both the Typhoon and the F/A-18 Super Hornet are ending production.

Airbus, he said, could kick in research and development funds from the various nations involved, but more important, bring a built-in marketplace in Europe, potentially including France, Germany and Spain, all nations that have yet to make moves toward the F-35. That would also fit Boeing’s recent trend of finding partnerships that open local markets for its products.

“On one side, you have very weak prospects for European funding and extreme unlikeliness of an industrial alliance between two longtime mortal enemies,” Aboulafia said. “On the other side of the equation, they have an awful lot in common, in that they have a pressing need to do something, and the idea just makes a great deal of sense if they could somehow pull it off.”

Of course, if Boeing and Airbus were to work together, the companies would have to work around a long history of competition on both the commercial and military sides of the market. Airbus, in particular, is still smarting from Boeing’s legal victory in the Air Force’s KC-X tanker replacement competition.

The commercial competition could also prove a sticking point, Callan warned.

“It’s Hatfields and McCoys,” he said. “The commercial people on both side would argue ‘Why are you teaming with our arch-enemy to do things that might strengthen them and make them a tougher competitor?’ ”

Aside from a relatively small European market boost, Callan and Barrie are skeptical that Airbus really brings anything to the table the US giants would not already have.

Barrie compared the situation to the F-35, where BAE Systems is a major industrial partner. But BAE had significant experience with the vertical take-off and landing technology at the heart of the F-35B model, and the UK was a crucial political ally in keeping the program from being canceled. Neither of those factors are likely to be available from an Airbus collaboration, Barrie said.

“I can see lots of reasons not to do it from an American standpoint,” he said. “It’s difficult to see there is any technology Airbus has that Lockheed or Boeing would be pounding at the door to gain access to.”

What about from a strategic standpoint? During the conference, Raso argued that developing a single trans-Atlantic NATO fighter would make sense.

“What has happened with certain capabilities is they have been developed by only one country or two, and we are competing against each other, against others who are not part of NATO,” Raso said. “We need to change our mind and we need to mutualize, maybe, the energy and the funding, and we need to clarify much better what we want for two properties, maybe for internal and then to be capable to support other countries beyond the boundaries of the NATO.”

A joint NATO fighter is “a great idea,” Aboulafia said. But there is a reason it never happened — getting all the NATO partners on board with funding, requirements and production is a herculean task.

“It was a great idea in 1995, in 2005, in 2015 and it might just be a great idea in 2025,” he said. “Harmonizing requirements and harmonizing numbers will always be a big challenge.”

Callan argues that instead of looking at a NATO fighter, Airbus should be thinking globally.

“Why wouldn’t you get a group of Northrop Grumman, BAE, Saab and Airbus? Why not Airbus, Northrop and Turkish aerospace?” he asked rhetorically. “Think about it from the global scale and standpoint. To just think of this on the trans-Atlantic standpoint is really missing the way the market is going.”

While the dream of a joint Airbus-US fighter might be far away, Raso is focusing on building smaller bridges. That includes on cybersecurity, where he hopes to see greater collaboration on protecting intellectual property.

“I think in this case we have a common enemy,” he said. “It’s a common enemy today when you talk about the cyber attacks, none of those companies are willing not to cooperate to avoid these kind of things, because they attack to the pillars, to the basements of those companies.” ■

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