Airbus targeting US military deals

AIRBUS, in which BAE Systems has a 20% stake, is preparing to invest hundreds of millions of pounds in an assault on the US market.

The aviation giant has held talks with its American rivals Lockheed Martin and Northrop Grumman with the aim of setting up a joint venture company.

Airbus wants a US factory to build military air tankers or convert passenger jets to freighters. The plant would cost hundreds of millions of pounds, but the company hopes the investment will pay dividends, with lucrative orders from America's defence industry.

Airbus is targeting the $100 billion (£62 billion) military tanker market for 500 planes for the US Air Force.