Measured by sales, EADS is the third largest aerospace company in the world (after Boeing (Boeing Company) and Lockheed Martin (Lockheed Martin Corporation)). It holds an 80 percent share in the consortium Airbus Industrie and is responsible for the final assembly of Airbus aircraft. EADS has a controlling interest in the joint venture Astrium (created 2000), the first trinational space company, whose facilities in France, Germany, and Great Britain cover a full spectrum of the space business from ground systems and launch vehicles to satellites and orbital infrastructure. Its Eurocopter subsidiary develops, builds, and markets a comprehensive range of military and civil helicopters. EADS also has stakes in Arianespace, which markets the commercial services of the Ariane family of launch vehicles; the Eurofighter consortium to develop a multirole combat aircraft; Avions de Transport Régionale (ATR), a leading maker of regional turboprop aircraft; and the French aerospace firm Dassault (Dassault Industries), which builds the Mirage and Rafale families of fighters as well as Falcon business jets. In 2001 EADS, BAE Systems, and Italy's Finmeccanica group agreed to combine the missiles and missile-systems activities of their subsidiaries Matra BAe Dynamics, EADS Aerospatiale Matra Missiles, and Alenia Marconi Systems into a single pan-European corporate entity with the name MBDA. At the start of the 21st century the company employed some 100,000 people at more than 90 locations.

Aerospatiale Matra was formed in 1999 from the merger of Aerospatiale (Société Nationale Industrielle Aérospatiale) with Matra Hautes Technologies, a subsidiary of the Lagardère Group. Aerospatiale's history dates to 1936, when France's leading aircraft makers were nationalized and combined into six companies according to their geographic locations. Through successive mergers and renamings, four of the six became two companies and then one, Sud Aviation, which was formed in 1957. The remaining two, following integration and amalgamation with a third partner, became Nord Aviation in 1958. Sud Aviation achieved great success internationally with the Caravelle medium-range jetliner and the Alouette helicopter series. It also served as the initial French partner for the Concorde supersonic transport, developed in the 1960s and '70s with the United Kingdom. In order to improve efficiency by avoiding duplication of effort, Nord Aviation, Sud Aviation, and French missile maker SEREB (Société pour l'Étude et la Réalisation d'Engins Balistiques) were merged in 1970 to form Aerospatiale. Two years later Aerospatiale joined Messerschmitt-Bölkow-Blohm GmbH (later DaimlerChrysler Aerospace) with its subsidiary Lenkflugkörper GmbH to form Euromissile. Successful guided missile systems developed by Euromissile include the medium-range Milan and long-range HOT antitank weapons and the Roland air-defense missile.

Although its codevelopment of the Concorde never brought Aerospatiale the financial success that it had expected, its participation in Airbus Industrie did. In 1970 Aerospatiale became a founding partner of Airbus, in which it first held a 50 percent share and later a 37.9 percent stake. Formed to fill a market niche for a high-capacity, short-haul jet transport, the consortium eventually became the second largest maker of commercial aircraft in the world ( Boeing Company is first).

In 1981 Aerospatiale and Italy's Aeritalia (predecessor of Alenia Aerospazio) merged their designs for a turboprop regional aircraft and formed ATR as a 50-50 joint venture to develop, market, and support regional transport aircraft. ATR developed a family of high-wing, twin-turboprop aircraft in the 40–70 seat range based the ATR 42, its first product (entered service 1985), and the later ATR 72 (1989). In 1992 Aerospatiale and Deutsche Aerospace (later DaimlerChrysler Aerospace) merged their helicopter divisions to form the common subsidiary Eurocopter, which became wholly owned by EADS in 2000. Eurocopter was a leading manufacturer of civil helicopters and also expanded in the military market with its Tiger combat helicopter and NH-90 transport helicopter. In 1998 the French government transferred ownership of its 45.76 percent stake in Dassault Aviation to Aerospatiale (the remainder being privately held by founder Marcel Dassault (Dassault, Marcel)'s heirs and financiers).

Matra (Mécanique Aviation Traction), Aerospatiale Matra's other line of heritage, was founded in 1945. In 1951 a Matra-built aircraft was the first in Europe to break the sound barrier, and in the 1960s the company emerged as a prime European contractor for satellites. In 1990 Matra merged its space activities with GEC-Marconi's aerospace division to form MMS, which in 1994 expanded through its acquisition of British Aerospace Space Systems.

In 1992 Matra merged with the French media company Hachette to become, as Matra Hautes Technologies, part of the Lagardère Group. The missile activities of Matra and British Aerospace (BAE Systems) (later BAE Systems) were combined in 1996 in a 50-50 joint venture named Matra BAe Dynamics. In 1998 the French government announced a plan to partially privatize Aerospatiale and combine it with Matra Hautes Technologies. The following year the transformation was completed with the formation of Aerospatiale Matra. The French government received a 48 percent share of Aerospatiale Matra and the Lagardère Group a 33 percent share, with the rest in public and employee ownership.

DaimlerChrysler Aerospace was formed in 1989, under the name Deutsche Aerospace AG (Dasa), as a wholly owned subsidiary of the German automobile maker Daimler-Benz AG. It changed its name to Daimler-Benz Aerospace in 1995 and adopted its present name in 1998 (while keeping the acronym Dasa) to reflect the merger of its parent company with Chrysler Corporation, forming DaimlerChrysler AG.

The origin of Dasa dates to 1984, when the German automobile maker Daimler-Benz AG announced its intention to reorganize Germany's aerospace industry. By the next year the company had acquired a 100 percent interest in the aircraft-engine manufacturer Motoren- und Turbinen-Union München (MTU) and a majority interest in Dornier, a maker of aerospace and medical products. AEG AG (formerly AEG-Telefunken AG), a maker of electrical systems, turbine engines, and communication, radio, and radar systems, became a subsidiary in 1986. Messerschmitt-Bölkow-Blohm GmbH (MBB), the leading German aerospace group at the time, was acquired in 1988. In May 1989 Daimler-Benz formed Deutsche Aerospace AG from Dornier, MTU, and two sectors of AEG; it brought in MBB later in the year. In 1993 Deutsche Aerospace acquired a controlling interest in the Dutch aircraft manufacturer N.V. Koninklijke Nederlandsche Vliegtuigenfabriek Fokker (Royal Dutch Aircraft Factories Fokker), established by the aviation pioneer Anthony H.G. Fokker (Fokker, Anthony Herman Gerard) in 1919. Because of mounting losses at Fokker, Dasa ceased financial support for it, resulting in bankruptcy for Fokker in 1996. Dasa subsequently acquired Fokker's German aerospace subsidiary Vereinigte Flugtechnische Werke. (VFW).

VFW, Dasa's other main German aerospace acquisition, was created in 1963 through the merger of Focke-Wulf (founded 1924) with Weserflug and later with Heinkel (founded in 1922). From 1969 VFW was a part of Fokker until uniting directly with Dasa in 1996. Dornier began in 1914 as an aircraft-design group of the German dirigible maker Zeppelin-Werke under the direction of Claudius Dornier (Dornier, Claudius). In 1922, as a separate company, it took the name Dornier GmbH (later, for a time, Dornier-Werke GmbH).

In the first decade after its founding in 1923, Spain's Construcciones Aeronáuticas S.A. built a number of Wal “flying boats” under license from Dornier, and it undertook the development of its own first design, a light aircraft called CASA-1. During and after World War II it produced more than 200 German-licensed Heinkel He 111 bombers.

In the early postwar years CASA turned to the development of propeller-driven transport aircraft, among them the C-201 twin-engine light transport (first flown in 1949) and the heavier C-207 (1955); the latter was never used in its originally conceived role as a passenger aircraft but instead was a military troop and cargo transport. In 1971 the company joined the Airbus Industrie consortium with a 4.2 percent share. In the same year, it first flew its high-wing, twin-turboprop C-212 light military transport, designed to operate from short, unpaved runways. Larger short-takeoff-and-landing military transports followed, including the twin-turboprop CN-235 (1983) and its heavier, longer-range derivative, the C-295 (1998).

In the late 1960s CASA gained experience in jet fighter manufacture when it received a license to build fighter and trainer versions of Northrop's supersonic, twin-engine F-5 for the Spanish Air Force. It subsequently developed its own single-engine C-101 jet trainer (1977). It also joined Dasa, British Aerospace, and Italy's Alenia in the Eurofighter program. CASA's Eurofighter Typhoon prototype, designated DA6, first flew in 1996. Prior to its privatization and incorporation into EADS, CASA was owned by the Spanish state holding company SEPI.