The Restructuring of FCAS

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The centerpiece of the Future Combat Air System (FCAS) project – the development of a New Generation Fighter (NGF) – has been cancelled. If FCAS no longer has a future, it certainly has a past. Nine years of attempted cooperation among France, Germany, and Spain yielded a wealth of lessons about how to organize European defense-industrial cooperation. The cancellation of the NGF should not obscure successful instances of collaboration. To enable a Europeanized defense industry, Germany, France, and other partners must learn from the successes and failures of FCAS.

FCAS established national programs dedicated to creating the future architecture of national air forces. The primary component of FCAS is the New Generation Weapons System (NGWS), a project by France, Germany, and Spain to develop common weapons technology that would be integrated into each of their national FCAS architectures.

The NGWS project is comprised of seven pillars (see table below), each of which operated largely independently with various degrees of success. Contractor cultures, leadership models, and industrial priorities affected each of these pillars differently. Some of them – such as the combat cloud and sensors – seemingly yielded successful cooperation. Others – remote carriers and the New Generation Fighter Engine (NGFE) – got on track after apparent early difficulties. The complete paralysis of the NGF pillar significantly affected others. So too did the lack of agreement on what constituted “Item Zero,” the project’s overall organizational structure that was supposed to harmonize the individual areas and coordinate joint working practices. Based on documentary research and background interviews with actors from the fields of government, the military, research, and industry, this DGAP Policy Brief draws lessons for European defense-industrial cooperation in three areas: establishing political leadership and a clear scope for cooperation, delegating responsibility, and aligning incentives for cooperation.

The FCAS Project

Structure

From its start in 2017, the FCAS project aimed to provide a broad structure to maximize the interoperability of European air forces. The seven pillars of NGWS encompassed crewed air power, remote carriers (drones), and an open communications and information-sharing system (the combat cloud), as well as enabling subsystems (an aircraft engine, sensors, stealth technology, and a working environment). They were governed by a common plan, Item Zero, that aimed to dictate the objectives and specifications of the NGWS and ensure cross-pillar interfaces. Furthermore, each of the partner countries developed its own national FCAS program centered on the common NGWS but that also included additional national elements accounting for the specificities of each partner’s air force and other assets.

Timeline

To enable this common development, the NGWS project prescribed that all pillars simultaneously move from phase to phase – from a conception study through technological development and demonstration to production. While some discrepancies could be managed, synchronization between phases aimed to ensure both hardware compatibility and conformity with the ­objectives set out in Item Zero.

Spain entered into the program in 2019. Thus, the first major test of this new organization followed in 2022 as the NGWS progressed from phase 1A (joint conception study) to 1B (technology development). At this point, involvement by the national governments of Germany and France was already required to force a compromise on working practices. The rebalancing of workshares from two to three national partners, each now responsible for a third of the work, introduced severe friction as industrial partners had to renegotiate established working agreements.

By 2025, the dispute had become characterized as an industrial disagreement between the two lead companies, Dassault and Airbus, the latter of which was responsible for the contributions of both Germany and Spain to the NGF. As Dassault CEO Éric Trappier claimed his willingness to build a “national FCAS,” Germany’s Aerospace Industries Association (BDLI), Airbus’s workers council, and the IG Metall trade Union all demanded the protection of German industry.

The paralysis of the NGF pillar inevitably led to the stalling of other pillars. The failure to progress to Phase 2 – building demonstrators – meant that existing contracts in other areas such as motorization, the combat cloud, and the sensors have or will expire. By June 2026, as German Chancellor Friedrich Merz announced the cancellation of the common NGF, work on the NGWS had largely ground to a halt. 

Under these conditions, speaking about the continuation of parts of the NGWS is illusory. Even without jettisoning the work already accomplished, any continuation will be done on the basis of new objectives and possibly new teams. Achieving an initial operating capability by 2040 – indispensable for the French Air Force’s nuclear deterrent – seems nearly impossible even with potential compromises to ensure speedy development.

The New Generation Fighter Pillar 

According to the explanations of German political and industry experts, responsibility for the failure of the NGF lies not in an inability to work with French industry but rather specifically with Dassault. In spring 2025, the French contractor reportedly demanded 80 percent of workshare to achieve a clear leadership role. Although the company denies these reports, they fueled the perception that it consistently rejected the agreed division into equal thirds.

Airbus and Dassault, Éric Trappier repeatedly explained, are competitors forced to collaborate against their nature. For him, the “best athlete” model would have been ideal. Such a model would have allowed Dassault to select subcontractors, divide the work according to needs, and assume leadership of the whole pillar. Trappier claimed that, if Dassault were given a clear lead, it could – far from “using German money to […] consolidate French aerospace industry” – deliver a cheaper and better aircraft on schedule.

Therefore, the disagreement on the NGF pillar boils down to working practices. Requiring agreement among all contractors – Dassault, Airbus Germany, and Airbus Spain – led to a paralysis of decision-making that could not be resolved by direction from the Item Zero. Moreover, those contractors were largely the same companies leading the joint conception of Item Zero (with Indra Systems as Spanish lead), causing further paralysis. Trappier’s complaint of being in a minority position against Airbus (as Airbus Germany and Airbus Spain were responsible for two thirds of the workshare) appears to be a fig leaf: it was the lack of unanimity among partners that led to paralysis not the number of partners per se.

Diverging National Requirements

The primary point of failure, however, lies in a lack of government direction. In September 2025, Trappier indicated to a parliamentary commission that there was no agreement on the size of the NGF. In January 2026, German Chancellor Friedrich Merz spoke of a fundamental incompatibility in the role the aircraft was expected to fulfill, noting the lack of German needs for a nuclear-capable, aircraft carrier-borne fighter. That such debates still existed nine years after the start of the project and five years after the conclusion of the Joint Concept Study speaks to a failure of planning by the national governments and their armed forces.

According to France’s perspective, its nuclear and carrier-capable requirements were already known in 2017 when FCAS was launched. Yet they were part of the French national components of the project – the NGF in a nuclear-armed configuration and its interface with the nuclear-armed French ASN4G missile – not the shared NGWS. While acknowledging the need for an NGWS that would allow for these additions, French experts argue that any restriction on information or intellectual property sharing with the German side would only affect the national portions of FCAS and not any common planning.

Nevertheless, the air forces of Germany and France diverge in their operational requirements. France seeks to replace both its multirole Rafale and remaining Mirage 2000 ground attack aircraft with the NGF; stealth and penetration capabilities are not necessarily priorities. Germany and Spain are looking for a successor to the Eurofighter with improvements on stealth, electronic warfare, and strong air-to-air capabilities. Further, Germany is orienting itself toward a dual air fleet consisting of the NGF and US-made F-35s (replacing the Tornado). Therefore, the NGF would be expected to fulfill different roles that France and Germany failed to reconcile as they upgrade their existing platforms.

This failure to reconcile national priorities is not an industrial failure. As Sébastien Lecornu, then France’s minister of defense, stated last July: “Governments decide and industry executes.” Still, such decisions must respect business imperatives – as repeatedly stressed by both Dassault and German industry. If industrial partners failed to execute, it is in large part because governments failed to decide. 

The Engine, Sensors, and Combat Cloud

The New Generation Fighter Engine (NGFE) progressed according to a different cooperation model. Early on, France’s Safran and Germany’s MTU Aero decided to form an equally shared joint venture, the European Military Engine Team (EUMET). Each company was assigned its specific area of activity: MTU Aero the front part of the engine and Safran the rear. This replicated a proven model of cooperation in aircraft engine development. The EUROJET consortium responsible for the development of the Eurofighter engine is similarly shared among participating countries (though ownership is dominated by MTU Aero and the United Kingdom’s Rolls-Royce). 

The late entry of Spain into the FCAS program challenged this structure. Despite the commitment to equal workshares within each pillar, EUMET remained strictly owned by Safran and MTU Aero. Spain’s ITP Aero was added as a “main partner” and eventually assigned some parts of the engine though without ownership or a governance role.

The cooperation model that was chosen for the New Generation Fighter Engine (NGFE) entailed the delegation and pre-planning of all key decisions on design, the demonstrator, and maintenance. It resulted in a reduction of potential conflicts although this was ­partly counteracted by the introduction of a new partner. Critically, the combination of two factors led to the acceptance of delegated decision-making: first, the structure of the companies and their histories of cooperation in which joint ventures are standard practice and, second, the magnitude of the NGFE development that represented a dramatic increase in power compared to the Rafale and Eurofighter. 

Similarly, delegated structures were also adopted for the combat cloud and sensors pillars that allowed each main contractor to control its work package. As with the engine pillar, delegation here resulted in a reduction in conflicts; although multiple interview partners thought it could potentially limit technological development. The companies involved in the sensors pillar – Indra Systems, Thales, and the FCMS consortium – also agreed on the need for collaboration. Oliver Dörre, CEO of consortium member ­Hensoldt, even spoke of potential collaboration ­beyond the NGWS.

In all three of these pillars, challenges arose from the need to integrate into a coherent NGWS architecture. While initial development required only general information about the NGF design, progression toward the construction of demonstrator engines, communication systems, and sensors required closer integration into the NGF. The paralysis of the NGF and Item Zero blocked any possibility of progression to Phase 2, including the issuing of further contracts. Due to the prioritization of interoperability, any progress without agreement on all components of the NGWS is inconceivable.

Lessons for European Cooperation

FCAS is far from the only French-German project at risk. France is reviewing its participation in the Airbus-led Eurodrone due to cost and schedule overruns, as well as criticisms about “yesterday’s drone, delivered tomorrow.” The Major Ground Combat System (MGCS), seen as the land-based equivalent to FCAS, is similarly at risk of collapse; French President ­Emmanuel Macron had linked the fate of both programs. Despite the different organizational structure of MGCS that centers on a joint venture, it appears to experience challenges like those of FCAS. As with the stalled development of the NGF, the focus has moved to intermediate solutions.

Meanwhile, further French-German cooperation programs enjoy strong political support. Key European capability gaps will be addressed by the European Long-Range Strike Approach (ELSA) and European Sky Shield Initiative (ESSI). The A400M transport aircraft is finally fulfilling its role as the backbone of ­European military mobility. Nevertheless, rocket launcher acquisition remains nationally distinct despite strong arguments for potential efficiencies through standardized procurement.

Given the strong emphasis on European cooperation, Germany, France, and Spain must learn from the failure of the NGWS. Alternate procurement models, whether through the Organisation for Joint Armament Cooperation (OCCAR) or minilateral formats, hold great promise but remain subject to the same structural factors, namely national industrial imperatives, partially diverging military requirements, political tensions, and difficulties in leadership.

Three lessons can be learned from these successes and failures: 

1. Provide Strong Direction

Fundamentally, the failure of the NGWS is a failure of political direction. Nowhere is that more apparent than in the long agony of the Dassault-Airbus cooperation that has persisted since spring 2025, which repeated rounds of governmental negotiations failed to resolve. The few agreements reached, such as on the size of the aircraft, were either immediately undermined or targeted the wrong issues. The sidelining of Spain – in which the Spanish government was more than happy to oblige – is a further symptom of political dysfunction.

Such political failure also marred the full project prior to 2025. The entry of Spain in 2019, while politically convenient, disrupted cooperation patterns – as ITP Aero’s uncomfortable “main partner” status demonstrates. The 2022 compromise to enable the move to Phase 1B, which was politically brokered, at best delayed inevitable fractures. At worst, it precipitated them by forcing immediate progression rather than resolving the underlying issues that had emerged. Successful collaboration outside the NGF stalled through the failure to agree on the Item Zero.

The direction of such projects must come from above. Requirements and specifications must be defined by ministerial and governmental leaders in consultation with – but not led by – industry. Crucially, such decisions must be made early in the project and not left to simmer until collapse. 

2. Delegate Work Effectively

The successful instances of cooperation in the NGWS demonstrate patterns of delegation under a common vision. While such delegation cannot resolve all problems – particularly where technological proficiency is seen as uneven – it significantly reduces sources of friction. This does, however, require strong direction, as well as companies that see cooperation as beneficial.

Delegation may be particularly suited to systems with components that can be readily divided and independently developed. In the sensors pillar, for instance, the variety of sensor systems allowed for a straightforward division of responsibilities. Similarly, the ­engine pillar was divided into two main components. The ­division of all responsibilities in engine development – design, technological development, and services and maintenance – demonstrates the potential for delegation of responsibilities throughout the lifecycle of the project.

While aircraft design cannot be readily broken down into components, the bulk of investment remains in maintenance, service, and lifecycle upgrades. Reciprocal concerns about sustaining domestic industries and worries about industrial returns could have been alleviated through the pre-delegation of responsibilities further into the lifecycle. Consequently, future projects should seek to combine maximum delegation with a strong common conception. Reducing ­sources of friction and making long-term returns tangible will ensure that companies are incentivized to work together.

3. Establish a Thick Industrial Cooperation Ecosystem

Cooperation functioned best when companies are set up for joint work. The EUMET engine consortium benefited from long-standing joint venture practices (the introduction of ITP Aero notwithstanding). Similarly, specialization and information sharing produced results in the combat cloud and sensors pillars. On the NGF, Dassault proved remarkably resistant to collaboration. As CEO Éric Trappier repeatedly mentioned, political instructions to cooperate with Airbus did not fundamentally change the fact that he saw few incentives to share benefits, particularly in exportations. 

For such major industries – and for their local governments – any loss is directly felt. The solution, therefore, lies in fostering a thicker network of cooperation and joint projects to reduce the load-bearing quality of any individual cooperation. While presenting FCAS as a generational, all-encompassing mega-project did have a laudable aim of enabling interoperability by design, it also introduced risks of failure by raising the stakes: for Dassault and Airbus, any losses on the NGF would be felt for decades to come. Distributing projects, multiplying cooperations, and promoting regular exchange will distribute both benefits and losses, encouraging compromise and diminishing the imperative to protect industrial outputs and competences at all costs. Other NGWS contractors demonstrated cultures of compromise and collaboration that were absent on the NGF pillar. To foster successful European cooperation, this culture of working together must be extended to a wide ecosystem – not through transnational super-champions (as parts of the FCAS project attempted) but by building industrial sectors that are well versed in regular collaboration. 

The Way Forward for Germany

FCAS was not doomed to fail. Both successful and failed cooperation within the NGWS show how such projects can succeed in the future. Germany’s air industry has now launched Team Gen 6, a new alliance of companies proposing to lead the development of a sixth-generation fighter, ideally with international partners. While Germany aims to continue developing the other NGWS pillars as part of a trio with France and Spain, the interlinking of all components, as well as the paralysis resulting from the stalled NGF, make such a continuation difficult. A new basis will need to be found for any further cooperation.

For Germany, the renewal of the project to update its combat aircraft offers an opportunity to correct course. First, any new project will need clear leadership. Germany’s Federal Ministry of Defence and its Air Force must determine which missions the aircraft should fulfill and which capacities will be needed. Tough decisions on capabilities, performance, design, and organization must be resolved from the start. Germany must clearly delineate which components can be jointly produced and which must be nationally retained, enabling national integration while establishing a clear basis for cooperation.

Second, as much as possible, tasks should be delegated to contractors with clear objectives, responsibilities, and latitude for action. While delegation will reduce sources of friction and disagreement, continuous monitoring is needed to ensure compliance with the overarching concept.

Third, Germany must foster a thick ecosystem of ­cooperation to Europeanize the defense industry. Super-champions are not the objective. While flagship projects may make political sense, a ­European defense industry can only be achieved through networks of joint projects realized through a web of cooperation-minded companies sustained through regular collaboration. Fostering this approach will enable German industry to accept some losses offset by other gains – none entailing a critical risk.

Through its successes and failures, FCAS shows the way forward for European defense. The solution is not to abandon joint development but to follow best practices in working with allies. Because structural industrial, political, and strategic constraints will affect all European defense projects, FCAS – in its failure – shows how they can be managed to ensure a stronger European defense ecosystem.