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Boeing and European rival announce tie-up on missile defence systems

Boeing of the US and the European aerospace and defence manufacturer EADS yesterday announced a ground-breaking deal to collaborate on ballistic missile defence systems.

The first partnering deal between the biggest American and the second biggest European defence companies could be followed by further joint ventures. Unveiling the tie-up at the Farnborough Air Show, Phil Condit, chairman of Boeing, said: "US and European industry came together today to show unity of purpose and appreciation of a common global threat."

On the opening day of the show, Mr Condit said Boeing was keen to see greater transatlantic collaboration on defence. "I don't see significant consolidation but I do see significant opportunities for a number of co-operative ventures across the Atlantic and we are actively working on those," he said.

The Franco-German led EADS also said it expected Europe to launch the €18bn (£11.5bn) programme for a home-grown military transport plane by the end of the year, and its engines will probably be chosen by September.

The Airbus Military A400M airlifter has not got off the ground as partner countries bickered over price and job shares. In the latest hold-up, the budget committee of Germany's parliament failed to take any decision on funding.

Although there was co-operation in defence, the war of words between Europe and the US over commercial aircraft production continued.

Noël Forgeard, Airbus's chief executive, rejected claims by a senior Boeing executive that it was flooding the market with aircraft that airlines did not want. Airbus expects output to fall by just 25 planes this year to 300 whereas Boeing is cutting production much more steeply.

Mr Forgeard maintained that Airbus has adopted a "very prudent posture" towards the market and had suffered only three cancellations this year. Last year it took 100 aircraft out of the order book.

Japan's All Nippon Airways announced that it had switched a £1bn order from Airbus to its US rival. Airbus, meanwhile, trumpeted an order from Qatar Airways for eight A330-200 jets.

Rolls-Royce said it was sticking by its forecast of 900 engine deliveries for this year.