That European ministers and heads of aerospace companies should meet to discuss the future of the industry is in no way exceptionable - but it is exceptional. The recent private meeting in Paris of representatives from France, Germany and the UK was both timely and necessary. It illustrates the growing acceptance by government and industry that European aerospace is in urgent need of even more co-operation and consolidation than it has yet achieved or planned.

At last, consolidation appears to be spreading downwards through the European airliner industry, with the announced engagement of the Aerospatiale, Alenia and British Aerospace regional-aircraft interests.

Likewise, progress has been made in space systems and in missiles and the aircraft-equipment sector is far more unified than it ever has been. Most of this consolidation has, however, been in the form of joint ventures and alliances which do little to resolve the core problem of overcapacity. What is needed is rationalisation through take-overs or mergers.

As those gathered round a table in Paris will have known, the possibilities for consolidation have been nowhere-near exhausted - and many of those possibilities involve far more painful decisions than those which have accompanied the consolidations made so far. The remaining areas in which consolidation has to be made if there is to be a truly rationalised European aerospace industry are those of combat aircraft, aero-engines and helicopters.

The helicopter industry did make some progress several years ago with the formation of Eurocopter. That, however, is still more of a multi-site joint venture than it is a true consolidation - and two significant European manufacturers (Agusta and Westland) remain outside it. For a market which represents but a small portion of world demand and production, that is too many.

In aero-engines, the problem is as great. There are two large European engine makers - Rolls-Royce and Snecma - and a host of smaller ones such as BMW-Rolls Royce, Fiatavio, MTU, Turbom‚ca and Volvo all designing and/or assembling aircraft engines.

Each is indulging in expensive research and development (much of it funded by the taxpayers of individual European countries), but few have a realistic chance of competing as independents in the next generation of engine battles.

For combat aircraft, the market is at least as overcrowded: there are significant combat-aircraft production lines at Warton, M‚rignac, Manching, Linkoping and Naples, not counting a host of lines for trainers and support aircraft. Unfortunately, there are almost as many combat-aircraft programmes in Europe as there are assembly lines - a situation financially and politically impossible to sustain.

In this latter case, there are the glimmerings of hope - although not in the traditional European sense. In France, Dassault is making a strong pitch for leadership of the next-generation European combat-aircraft programme. It does not want to be one of a politically hamstrung group, like the present-day Eurofighter partners, but a genuine leader. That might not be the most diplomatic approach - but it may well be the most practicable.

Dassault sees itself leading a primarily Franco-German alliance, partly because it is suspicious of British Aerospace's continuing dalliance with the USA and its advanced-fighter programmes. That may be painting too black a picture. It is just possible that a stronger, Franco-German Dassault and a stronger BAe (which is already taking a stake in Saab's military future) could co-operate on a future strike aircraft even while BAe pursues its specialist fighter ambitions elsewhere.

It begs the question: how far does Europe need to go on consolidation? Europe has too much of everything now, but it may not be essential for it to end up with only one of everything for it to be competitive. It will need many more round-table discussions to find that out.

Source: Flight International