No Airbus A400M aircraft rescue plan concensus

Partner-nations of Airbus A400M military transport plane fail to reach consensus on credits to EADS

Photo: Airbus A400M test flight

Seven governments in Europe have been unable to resolve the dispute among themselves over extending the 1.5 billion euros ($2 billion) in export credits to the European Aeronautic, Defence and Space Company (EADS), the parent company of Airbus Industrie, for continued development of the Airbus A400M military transport plane, which is a 7-nation joint venture.

Herve Morin, Defence Minister of France, told reporters after a meeting of the European defence ministers held in Palma de Mallorca, Spain, that a final agreement to rescue the Airbus A400M military transport plane has been put off to early March 2010 after the customer countries, especially the United Kingdom, failed to agree on the details of the rescue package.

Defence ministers from the 7 Europe nations will again meet on March 8, 2010, after reviewing the response of the EADS to the terms that these nations have offered.

The United Kingdom, France, Germany, Belgium, Spain, Luxembourg and Turkey are the partner-countries involved in the A400M military transport plane project.

A deadline to bail out the Airbus A400M military transport plane project lapsed on February 26, 2010.

Spain is especially concerned about the fate of the Airbus A400M project since the assembly line of the transport plane is located at Seville in Spain.

With the biggest defence programme in Europe about 2.4 billion euros over budget and with the United States supporting a military transport plane by the US-based Boeing Company, the EADS has threatened to pull out unless the European governments offer additional funds. The EADS has told the partner-countries involved in the project that it will not ask for any more than the 2 billion euros already offered, Herve Morin, Defence Minister of France, said.

Since the original contract the 7 the partner-countries of Europe signed in 2003 was 20 billion euros for 180 Airbus A400M planes, the increase of 2 billion euros will jack up the price up by 10%.

According to a report by auditor PricewaterhouseCoopers, the cost of the Airbus A400M project could go up to as much as 30 billion euros if risks are not reduced. And, Airbus Industrie has not disputed this projection.

Tom Enders, chief executive of Airbus, said in Tokyo that he is confident about continuing the A400M programme.

It may be noted that European counties have been hampered for long by a shortage of capabilities in strategic military airlift. In the 1990s, the European nations had a hard time deploying forces to trouble spots in Kosovo and Bosnia without using the US Air Force’s transport planes like the Boeing C-17 Globemaster III.

According to Airbus, the A400M military transport plane – which uses the biggest turbo-prop engines ever fitted to an aircraft made in the West – can carry twice the load of its competitor, the Lockheed Hercules. Airbus also claims that the fuel-efficient power plants of the A400M make it cheaper to operate than the jet-powered Boeing C-17 transport plane.