PARIS — A 50-50 joint venture between France’s Safran and Germany’s MTU will be incorporated by the end of 2021 to manage the development and production of an engine that will power the Next Generation Fighter, a key segment of Europe’s Future Combat Air System program, the companies announced this week.

Safran Aircraft Engines will be the prime contractor, taking the lead in engine design and integration, while MTU Aero Engines, as the main partner for the first phase of research and technology, will take the lead in engine services.

The industrial agreement is based on the principles that were set out in a letter of intent signed between the two companies last February.

"This agreement is a major step forward, which reflects Safran Aircraft Engines and MTU Aero Engines’ willingness to ensure a strong and effective management of the program relying on a balanced partnership and clear accountabilities,” Olivier Andriès, CEO of Safran Aircraft Engines, and Michael Schreyögg, chief program officer of MTU Aero Engines, were quoted as saying in a joint statement.

The agreement lifts the last impediments that were standing in the way of contracts being signed by the French, German and Spanish governments; now companies can get the Future Combat Air System program underway.

Joël Barre, the director of France's procurement agency, the DGA, said on Oct. 2 that appointing Safran as prime contractor on the engine program with MTU Aero Engines as principal industrial partner was one of the two elements that remained before launching work on a technology demonstrator for the New Generation Fighter.

The other element is organizing the entry of Spain into the program. Although Spain signed up for the program during the Paris Air Show last June, the industrial aspect of its participation has not been settled.