Tim Ripley
The spectre of European aerospace industry consolidation is hanging above Asian Aerospace '98 like a gathering storm cloud.
Everybody knows it's about to happen but a clear road map to the future has yet to emerge from the high-level discussions taking place in the boardrooms of Europe's aerospace companies.
With only a month to go to the deadline set by the British, French and German governments for the continent's aerospace leaders to present their plans for a pan-European super company or grouping of companies, to compete with the American giants, few details have been made public.
"It is clear it's going to happen," says one British industry executive at Singapore. "The attitude of the French and Italian governments will be decisive - they have to decide if they are going to continue supporting their loss-making state-owned industries."
The announcement last week by British Aerospace of a $952-million profit (pre-tax and provisions) for last year, which is almost as much as the total profit of all the French aerospace and defence industry put together, even though BAe has only a third of the turnover of the French industry, aptly illustrates the dilemma facing Europe.
Pruning
British and German government and industry leaders have all gone on record stating that European consolidation can only happen if the private sector leads the way and loss-making state industries lose their government subsidies, leading to a pruning of Europe's current over-capacity.
The best indications of the way the consolidation process is proceeding comes from France where a corporate restructing of the state-controlled Aerospatiale grouping was announced earlier in February.
This has created distinct subsidiaries out of the main Aerospatiale business units - Airbus, civil aircraft, helicopters, missiles and space. These elements are now open to forge alliances with new European partners and possibly undergo some degree of privatisation.
Recent announcements by the French government, particularly concerning the formation of the Airbus corporate entity, have indicated a move away from its previous dogmatic attachment to state ownership.
Flounder
Attempts by the French government to forge a 'shot-gun wedding' between the privately-owned Dassault and Aerospatiale's non-Airbus aircraft activities look set to flounder amid very public opposition from Serge Dassault.
The veteran French aerospace industrialist is now talking about joining forces with BAe and DASA to form a private-sector European military aircraft company, claiming Eurofighter and Rafale can "-live together."
On the helicopter front, the Italian government is moving to privatise the Finmeccanica holding group which opens the way for a merger of Britain's privately-owned GKN Westland Helicopters and Italy's Agusta.
Any link with the French government-dominated Eurocopter group is more problematical, say industry sources.
Source: Flight Daily News
