Airbus has suggested building two separate fighter jets to break the deadlock over Europe’s €100bn Future Combat Air System.
The plan would allow the wider project to continue despite disagreements between partners.
The dispute pits Airbus’s defence arm, representing Germany and Spain, against Dassault Aviation of France.
The companies are competing for leadership of the next-generation fighter element.
The programme also includes drones and a digital combat cloud.
Chief executive Guillaume Faury said the impasse must not endanger Europe’s future defence capability.
He argued a split approach could attract additional partners if governments approve it.
German chancellor Friedrich Merz recently said the planned aircraft does not match Germany’s needs.
Berlin does not require a nuclear-capable jet, unlike France.
France, Germany and Spain must soon decide whether to proceed with the fighter or focus on other parts of the project.
Airbus reported a 23% rise in annual profit to €5.2bn.
However, supply chain shortages, especially engines from Pratt & Whitney, forced it to cut production targets for the A320.
January deliveries fell to their lowest level since 2020, helping rival Boeing close the gap in aircraft output.
