* Collapse of Franco-German fighter project highlights EU

defence industry struggles

* Protesters block access to event

* Germany unveils new 15-year aviation strategy

(Changes media identifier, recasts, adds quote, details)

By Joanna Plucinska and Christina Amann

BERLIN, June 10 (Reuters) - Germany's ILA air show opened on

Wednesday under the twin shadows of the Iran war and the

collapse this week of a flagship Franco-German fighter jet

project, clouding what is meant to be one of Europe's premier

aerospace showcases.

The Berlin event, which dates back to 1909, puts a large

slice of Europe's defence industry on display as companies pitch

new technology to governments and military buyers.

It also highlights the push by European manufacturers to

narrow the gap with U.S. rivals and persuade governments to back

them as the region ramps up defence spending.

Yet the build-up to the show was dominated by the scrapping

of the Franco-German Future Combat Air System (FCAS), long

billed as Europe's most ambitious defence project but ultimately

undone by industrial rivalry. Its demise has underscored the

difficulty Europe faces in building military capacity at scale.

The decision comes as Western officials warn of a growing

threat from Russia and the U.S. presses Europe to re-arm more

quickly.

RESHAPING ALLIANCES

Airbus, which represented Germany and Spain in

FCAS, is increasingly looking to Sweden's Saab as a

preferred partner, as companies jostle to reshape industrial

alliances, three people familiar with the matter told Reuters.

The Iran war has added to the sense of unease, exposing

strains in transatlantic ties and even raising questions about

NATO's future, while also hitting airlines as flights are

cancelled and jet fuel costs rise.

Chancellor Friedrich Merz, who has openly questioned whether

a manned sixth-generation fighter jet still makes sense for

Germany's air force, is due to address the show on Wednesday.

MTU Aero Engines Head of Programmes Ottmar

Pfaender said decisions on how to proceed must be taken in the

coming weeks, adding the engine maker was open to working with

other companies.

Stephanie Lingemann, a senior executive at defence startup

Helsing, said technologies such as software-driven defence

systems and autonomy in warfare could now be folded into

whatever follows FCAS.

"There's always a chance in these kinds of endings," she

said.

WALKING TO THE VENUE

The air show is also a platform for Emirates President Tim

Clark to press the German government for landing rights in

Berlin, with one of the Gulf airline's A380 jets on display.

The opening day was disrupted by protesters who blocked

roads to the venue while chanting slogans including "Free

Palestine".

A Reuters witness said dozens of police were deployed, with

buses unable to reach the site and hundreds of visitors forced

to walk in, some complaining about the disruption.

Running from June 10 to 14, the ILA show will host more than

750 exhibitors from 37 countries.

Coinciding with its opening, Germany's cabinet approved a

new 15-year aviation strategy aimed at cutting costs and

boosting research to tackle rising expenses and intensifying

foreign competition.

(Additional reporting by Maria Rugamer. Writing by Matthias

Williams. Editing by Thomas Seythal and Mark Potter)