pounds 10bn Eurofighter deal agreed at last

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The Independent Online

Britain and Germany last night settled a year-long wrangle over production of the Eurofighter aircraft, opening the way to new business worth pounds 10bn for the aerospace industry.

The new aircraft is a joint project involving Britain, Germany, Italy and Spain, all of which plan to buy it for their respective air forces, but there has been disagreement over the share of work to be undertaken by Britain and Germany.

The two main beneficiaries of the deal in the UK will be British Aerospace at Warton, Lancashire, where the aircraft will be built, and Rolls-Royce at Derby, which will take the lead in engine production.

Originally Britain and Germany were each going to order 250 aircraft, entitling each to a one-third share of total production. Italy and Spain, with lower orders, would share the remaining third of the workload. Following reunification, Germany decided it needed only 140 of the new aircraft, but continued to insist that it should still do one-third of the total manufacturing work.

The first step towards an agreement came with a German decision to increase its order to about 180 aircraft, then at a meeting in London yesterday, James Arbuthnot, Minister for Defence Procurement, and Jorg Schonbohm, his German opposite number, agreed on a new work-sharing formula.

In a joint statement, the ministers said that the agreement "resolved issues of production work share" subject to settlement of details by officials. It would, they said, "provide a firm basis for planning by industry."

Eurofighter represents the next big opportunity for Europe's hard-pressed defence aviation industry, with worldwide export potential. It will be one of the world's most advanced combat aircraft, combining high speed and high agility. It will outperform every fighter in the world - apart from the F-22, now being developed by the US, and likely to be twice as expensive.