STUTTGART, Germany — Nearly four years after the pan-European Future Combat Air System (FCAS) program was first brought to light, the three partner nations have reached a deal to develop a demonstrator fighter aircraft by 2027.

French Minister of Defense Florence Parly formally announced Monday that France, Germany, and Spain had finalized an agreement that will allow industry partners to start developing a flying prototype aircraft, after months of uncertainty surrounding the negotiations.

The agreement is a shot in the arm for the multinational program, as stakeholders are racing to reach a financing deal before the German Bundestag leaves town for their summer recess in late June. Disputes among the nations’ industry partners over elements such as intellectual property rights and work share slowed progress. In April, however, France’s Dassault Aviation and Germany’s Airbus reached their own deal to move on to the demonstrator phase. The two companies, along with Spain’s Indra, lead each country’s industrial participation.

If the program remains on schedule, the first FCAS demonstrator will launch one decade after the French and German government leaders first agreed to jointly build a new sixth-generation fighter aircraft. Spain was brought on as a full nation partner in 2020.

The quality of the demonstrator phase of FCAS – also known as SCAF, for the French name système de combat aérien du futur – will be key to the success of the overall program, observers have previously noted. The goal is to reduce the risk of technological hurdles early on, in order to avoid delays and additional cost hurdles further down the line, analysts previously told Defense News. 

Parly confirmed in Monday’s statement that the FCAS program is still expected to reach full operational capacity by 2040. The “system of systems’' will include not only the new fighter aircraft, but also an upgraded weapon system, new remote carrier drones, an advanced combat cloud, a new jet engine, and advanced sensors and stealth technologies.

There were mixed signals from Paris and Berlin late Monday about the costs involved. A French defense spokesman confirmed that the demonstrator phase was expected to cost 3,5 billion euros (U.S. $4.25 billion), split equally among the three participating nations. Defense officials in Berlin said the Implementing Agreement 3, which is the document governing the upcoming program stages 1B and 2, comes with a price tag of more than 4 billion euros ($4.9 billion) for Germany alone.

Either way, the figures are up significantly from a previous cost estimate of 2,5 billion euros that the governments prescribed to companies as a ceiling last year.

The figures now circulated essentially reflect that industry offers came in 25 percent higher than that, as Defense News reported last week. Additionally, national government contributions that industry previously took for granted – engines and airfield time, for example – are now formally priced in, a German defense source explained.

Officials in Berlin were optimistic on Monday that the sticking point of so-called specific foreground information (SFI) also would be resolved soon. While the agreement announced by the three governments refers only to a general compromise on intellectual property rights handling, the status of national industrial contributions brought into the FCAS program at the outset, dubbed SFI, had remained unresolved for months.

As of March, French demands on SFI exceptions, formalized in a list circulated in the three capitals, had caused a stir in Germany and Spain. Officials in those countries believed the overarching legal framework on intellectual property rights was sufficient to account for claims on pre-developed components, German defense officials wrote in a report to parliament.

German and Spanish companies later included their own carve-outs on the SFI list, a German defense source said.

A defense ministry spokeswoman in Berlin told Defense News the final list would be included in the approval package forwarded to lawmakers in late June.

The new agreement includes only one demonstrator, to be built by Dassault, the spokeswoman said. Additional demonstrators, as some German lawmakers have called for, would have to be purchased extra, and the stipulation is that they must be identical to the first one.

Sebastian Sprenger contributed to this report.

Vivienne Machi is a reporter based in Stuttgart, Germany, contributing to Defense News' European coverage. She previously reported for National Defense Magazine, Defense Daily, Via Satellite, Foreign Policy and the Dayton Daily News. She was named the Defence Media Awards' best young defense journalist in 2020.

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