PARIS Airbus plans to merge two separate fighter businesses as part of a reorganisation of its Defence & Space division, union sources said.

The move brings together Military Air Systems - which includes Airbus's share of Eurofighter - and the business overseeing its share of the Franco-German-Spanish FCAS/SCAF project to replace Eurofighters and French Rafales.

Asked about the new combination, which is part of a deeper Defence & Space restructuring codenamed ATOM, an Airbus spokesperson said: "We are currently discussing the details and ideas with our social partners".

"The transformation might entail some organisational refinements; however the bigger focus is on governance, process and ways of working," the spokesperson added.

Headed by Jean-Brice Dumont, Military Air Systems also includes the A400M and C295 transporters, the MRTT aerial tanker programme and unmanned vehicles including Eurodrone.

Airbus is involved in FCAS/SCAF alongside France's Dassault Aviation with which it reached a hard-fought agreement on the development of a demonstrator last December. The Airbus part of the programme is headed by Bruno Fichefeux.

In July, Airbus Chief Executive Guillaume Faury said a reorganisation in Defence & Space was designed to make the business more agile. The company has not given any specifics on the revamp.

"This transformation is necessary for the resilience and the competitiveness in this division," Faury told analysts.

Despite a broad increase in overall demand for weapons since the Ukraine conflict began, Airbus Defence & Space is the company's second-biggest activity in terms of revenues but the least profitable, lagging behind jetliners and helicopters.

At the half-way stage this year, it posted 87 million euros of operating profit on sales of 4.65 billion euros, after swinging back to profit from a loss at the same time last year.

(This story has been corrected to say '87 million,' not '87 billion,' in paragraph 10)

(Reporting by Tim Hepher; Editing by David Holmes)