Airbus Group has entered into an agreement with Siemens to build hybrid electric propulsion systems for the aviation industry by 2020.

As part of the deal, both the companies have launched a joint project with an aim of demonstrating the technical feasibility of various hybrid or electric propulsion systems.

Both companies have created a team of nearly 200 employees to help innovate and develop electrically powered aircraft.

Airbus and Siemens seek to jointly develop prototypes for various propulsion systems with power classes ranging from 100KW to 10MW and more for short, local trips with aircraft below 100 seats, helicopters or UAVs up to classic short and medium-range journeys.

"We believe that by 2030 passenger aircraft below 100 seats could be propelled by hybrid propulsion systems."

In addition, both companies have agreed to collaborate exclusively in selected development areas, as well as plan to continue to work together with their current partners for small aircraft with fewer than 20 seats.

Airbus Group CEO Tom Enders said: "Electric and electric-hybrid flight represent some of the biggest industrial challenges of our time, aiming at zero-emissions aviation.

"The progress we have achieved in this arena, together with our industrial and governmental partners, in only a few years is breathtaking, culminating in last year’s channel crossing of our all-electric E-Fan aircraft.

"We believe that by 2030 passenger aircraft below 100 seats could be propelled by hybrid propulsion systems."

Hybrid-electric propulsion systems have the ability to reduce fuel consumption of aircraft and noise.

European emissions target aims to reduce 75% CO2 emissions by 2050 compared with the value for the year 2000, and, these goals cannot be achieved by traditional technologies.

Siemens president and CEO Joe Kaeser said: "Collaboration with Airbus Group will create new perspectives for our company and open us up even more to disruptive innovation.

"The undertaking will be an important project under the umbrella of our so-called Innovation AG. As previously announced, the aim of this unit is to cooperate with innovative partners in order to identify and invest in new trends and develop future-oriented business opportunities.

"These partners may include entrepreneurs from Siemens’ own employee environment, external start-ups and established companies."

In 2011, both the companies, along with Austria’s Diamond Aircraft, initially presented a hybrid aircraft and since then, Siemens has been developing an electric engine for aircraft which supplies five times as much power while retaining the same weight.