PARIS, July 29 (Reuters) - Airbus is drawing up

a new turnaround plan for its Space Systems business, industry

sources said, adding talks over potential European consolidation

to fend off competition include Italy's Leonardo as well as

France's Thales.

Airbus has launched an immediate cash containment plan

across the wider Defence and Space division, aims to announce

the specific Space Systems restructuring in September, and hopes

to complete a deeper Space Systems strategy review in the fourth

quarter as it reels from 1.5 billion euros of recent charges.

The companies involved declined to comment.