Paris: European aerospace conglomerate EADS announced Tuesday plans to merge its military transport division with Airbus, its civil aircraft manufacturing division. The move is intended to bring its struggling A400M programme under a unified command.
The restructuring will see EADS's Military Transport Aircraft Division (MTAD) integrated with Airbus and become its military wing under the name of Airbus Military.
EADS said it would also bring its satellite and defence divisions closer together without merging them. The EADS Astrium and EADS Defence & Security divisions handle top strategic projects for France and Germany.
EADS is the world's second-largest aerospace group after Boeing.
The 20 billion euro ($27.33 billion) A400M military transport programme is running an estimated 18 to 24 months late. This has led to increasing frustration among European governments.
More importantly, the delays have drawn away engineering resources from Airbus even as it is set to ratchet up its ambitious A350 jetliner programme, which is billed as a competitor to Boeing's 787 Dreamliner project.
Toulouse-based Airbus will now operate the A400M final assembly line in Spain and also be in charge of all Airbus military derivatives, including its stalled bid to sell air refueling tankers to the United States Air Force.
The deal is potentially worth $35 billion.
EADS, along with US partner Northrop Grumman, nearly secured the contract earlier this year, only to see it slip away following an appeal by rival Boeing.
EADS has been created from a 2000 merger of French, German and Spanish aerospace units.