Buy European, CEO of Airbus Helicopters urges military leaders

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By Tim Hepher

MARIGNANE, France (Reuters) - The head of Airbus Helicopters has urged Europe to back its domestic defence industry when launching major new military programmes, as a row simmers over U.S. arms imports.

The comments come weeks after six European NATO nations embarked on efforts to define future transport needs under the alliance's Next Generation Rotorcraft Capability (NGRC) project.

They also coincide with a standoff over Berlin's reluctance to buy into an upgrade of Airbus's Tiger attack helicopter over operational problems and a row with Norway over its decision to axe its fleet of NH-90 military helicopters.

"When there is a European solution, I think it is very important – and I have no doubt that Germany is taking that approach – to prefer European equipment: that is what Germany has shown for several decades with the Tiger and NH-90," Airbus Chief Executive Bruno Even told Reuters in a recent interview.

Airbus Helicopters is marking 30 years since it was born through a Franco-German merger prompted by the development of the original Tiger version, sponsored initially by France and Germany and later Spain.

"We are working closely with the German client to improve availability. We have seen results since a few months ago," Even told Reuters.

Even said the door for Germany to join France and Spain in the Tiger Mk III upgrade remained open, but responded sharply to suggestions that Berlin could instead buy Boeing (NYSE:BA)'s AH-64 Apache. "I don't imagine it for one second," he said.

'STUFF THAT FLIES'

Janes reported in November that Germany had requested information on the U.S. Apache, shortly before deciding to order U.S. F-35 fighters for a limited separate role.

Germany, which has criticised the Tiger's poor operational availability, has not said whether it will join Tiger Mk III but defence sources say it is off the table, at least for now.

Asked about criticism of purchases of U.S. equipment, German Defence Chief Eberhard Zorn last week hit out at big European arms projects, saying forces want "stuff that flies".

"First of all, we need equipment to fill the gaps that we have had for years and that we know," he told a thinktank.

European industry officials have however blamed Germany and others for over-ordering unnecessarily complex equipment to preserve skills in their defence plants, in contrast with off-the-shelf U.S. equipment that cannot be easily customised.

While it competes with Boeing and Leonardo on attack helicopters, Airbus agreed earlier this year to maintain H-47 Chinook heavy-lift helicopters sold by Boeing to Germany.

Even did not rule out further cooperation with rivals in areas where, like heavy-lift helicopters, Europe does not have a deep enough market to justify its own separate programme.

But he laid down a marker that Airbus would fight for future replacements of core programmes like the NH-90.

Airbus has teamed up with Leonardo to research technology to be fed into the NGRC programme, backed by the European Union's European Defence Fund.

Even meanwhile sought to defuse tensions with Norway over its decision to cancel the NH-90.

He said NHIndustries (NHI), the Airbus-led consortium responsible for building the helicopter, had not been given a chance to discuss Oslo's move in detail beforehand.

But he added: "I remain positive and still hope we can have a dispassionate and constructive debate, because I think NHI is able to offer solutions that meet the client's needs."