MTU Aero says new fighter project needs to get started soon

By Andrea Shalal

BERLIN (Reuters) - Germany and France need to hammer out a realistic timetable and key requirements soon for a joint next-generation fighter jet to ensure it will be ready for use by the target date of 2035, a top MTU Aero Engines (MTXGn.DE) executive said Friday.

MTU Chief Programme Officer Michael Schreyoegg also called for the creation of separate programmes for development of the aircraft and its engine to ensure greater control, unlike the approach taken on the troubled A400M military transport where engine maker MTU served as a subcontractor to Airbus (AIR.PA).

"2035 seems far away, but given the realistic development timeframes that we have to face, it's now the time to start," Schreyoegg told Reuters in an interview.

France and Germany unveiled plans in July 2017 to develop a European fighter jet, with an initial schedule expected by mid-2018.

Schreyoegg said he favoured one, or at most, two countries being in charge, in contrast to the eight-nation consortium that developed the A400M.

"What's important is that we work on a German–French airplane .... and that we don't fall back into a situation where 8 countries are setting 15 specific requirements," he said. "And we have to be realistic about the timetable."

The A400M programme, Europe's largest defence project, has been beset by glitches, cost overruns and delays. Industry and military officials say the next joint project must be structured carefully to avoid the problems that have plagued the A400M.

Schreyoegg said MTU began preliminary work on materials and other aspects of a next-generation engine two years ago, spending about 10 million euros each year. He said the costs would likely rise to about 80-100 million euros per year during the technological phase.

He said it typically took about seven to eight years to develop a new engine, and it would need to be ready by the end of the 2020s to allow sufficient flight testing of the new aircraft before 2035.

He said it was imperative to involve the customers from the start of the programme to ensure the new engine served their needs and was easy to maintain.

MTU is also urging the German military to adopt a more commercial approach to engine maintenance for the new programme.

Under so-called performance-based logistics contracts that are widely used in the commercial sector, companies like MTU service a fleet of aircraft or engines for a set fee. If problems arise, the company is liable, not the operator.

MTU argues that such contracts lead to much higher readiness rates than are generally reported in the military.

Schreyoegg said lawmakers and military officials were generally supportive of the company's recommendations for the new fighter project. But next steps would depend on Germany's Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support.

(Reporting by Andrea Shalal; Editing by Elaine Hardcastle)