by Ray Fleming

y that Britain, France and Germany could agree on a 28 billion pound mega defence and aviation merger crash-landed on Wednesday afternoon; the three co-pilots survived and immediately began to blame each other for the disaster. Publicly the blame for the fated flight was attributed to a dispute over where the headquarters of the new company would be located -- Munich perhaps? -- and who would be chairman and chief executive but in reality this deal was probably always destined to be air-bridge too far.

In theory it would have brought together Britain's BAE Systems and the Franco-German EADS operation in a single company of 220'000 employees with products ranging from nuclear submarines to Typhoon fighter jets and the A380 Airbus. It is said that at the last-minute Germany's Angela Merkel blocked any deal because of discomfort at mixing defence business with civil aviation but there were other obstacles from the start. For Britain a guarantee of security for the 37'000 workers engaged on the Airbus project was essential while the risk that BAE Systems security-tight projects for American defence contractors might be accessible to the new consortium led to anxious inquiries from Washington. It is unlikely that this ambitious merger will be revived in the near future. But might BAE Systems look westward to the prospect of some form of liaison with Boeing?

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