Austrian saga may be resolved next month

 - June 20, 2007, 12:11 PM

Eurofighter’s first export sale–to Austria–has not been a happy experience, although the company has met all its schedule and performance commitments to date. The first of 18 aircraft is already flying, the second will fly soon, there are four more in final assembly and parts for the other 12 are already in production. The first Austrian pilots have been trained on the aircraft in Germany.

But the choice of the Eurofighter, which was made in mid-2002, has always been controversial, and was opposed by the Social Democrat party (SPO) in opposition. Following elections late last year and the creation of a new coalition government that includes the SPO, Vienna’s new defense minister (from the SPO) has so far refused to take delivery of the aircraft. A parliamentary committee probed the deal and discovered that a lobbyist for EADS had made a relatively small payment for vaguely defined services to a company owned by the wife of the Austrian air force chief, Gen. Erich Wolf. As a result, he has been suspended from duty.

Eurofighter insists that it has done nothing to invalidate the contract. But it has been in negotiation with Vienna over possible cost reductions. A report in yesterday’s Austrian press that these talks have reached a successful conclusion was denied to AIN here yesterday. The company believes that a way forward may emerge next month, after the parliamentary committee delivers its report. The partner parties in the coalition are due to meet on July 10 and may approve a compromise at that time.