Airbus chief confident of finance deal for military A400M

TOKYO, Feb 25, 2010 (AFP) - Airbus chief Thomas Enders said on Thursday he was confident that seven NATO countries would soon reach agreement on how to share cost overruns for the A400M military transport plane.

Enders made the comment in Tokyo on the talks between the Airbus parent company the European Aeronautic Defence and Space Company (EADS) and the seven governments.


Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey have been involved in difficult negotiations in recent months over how to share any additional funding between client states and the European manufacturer.

EADS had threatened to pull the plug on Europe's largest defence project unless the countries that ordered 180 of the aircraft for 20 billion euros (27 billion dollars) pay more to cover cost overruns of about 5.2 billion euros.

Spanish Defence Minister Carme Chacon Wednesday said "we have reached an agreement in principle" -- but a German defence ministry spokesman said there had so far been no "written response" to the proposals by the seven nations.

However, Enders stressed that "I believe that we are close to an agreement" and added: "I think we get a significant contribution from the nations to this important project."

The A400M is a highly innovative aircraft which can carry troops, armoured vehicles and helicopters. The project is three years behind schedule mainly due to problems with the construction of its huge turbo-prop engines.

Built to replace ageing military cargo carriers in several European air forces, it carried out its first test flight in Spain in December.

With a list price of about 100 million euros, the A400M can fly as high as 40,000 feet (12,000 metres) and can land on short, unprepared runways.

The A400M was first agreed in 2003 by the seven nations. The maiden flight was first scheduled for 2008. Air forces were to take their first deliveries at the end of 2009, but they are now not expected until at least early 2013.

Enders admitted that the original target dates had been too ambitious.

"The mistakes that were made were made by us years ago in accepting a contract that was clearly not founded appropriately and accepting a timeline that was not appropriate," said the Airbus president and CEO.

However he added that, compared to other military programmes, "you will find that we are largely on track. We are developing a very capable aircraft for the air force and also for the export market in the future."


by Karyn Poupee
(c) 2010 AFP