A400M rescue goes past the wire

 - February 3, 2010, 3:26 AM

Airbus chief executive officer Tom Enders refused all comment on the A400M airlifter here yesterday as talks to continue the troubled project reached a critical stage in Europe. Defense procurement ministers from the eight European customer nations are to meet again today for the third time in as many weeks to discuss their negotiating position. Enders previously said he would seek permission from the EADS executive board to stop work on the project if no way forward was apparent to the company by last Monday.

The UK has made it clear that no more money is on the table, but a slightly reduced buy is acceptable, according to a senior British officer who spoke to AIN here in Singapore on Monday. But the big question is whether the other partner nations will hold to that line. Germany–the biggest customer–has also adopted a tough stance, while France and Spain are thought more likely to agree to additional funds. A deal may be done over the heads of the defense ministers by French President Nicholas Sarkozy and German Chancellor Angela Merkel, who also meet today.

According to a Reuters report last week, the nations rejected a revised request from Airbus parent EADS for an additional ?4.4 billion. Reuters earlier reported that EADS was requesting ?5.3 billion more, while offering to absorb a further ?3.6 billion in projected costs. The group has already made provisions of ?2.4 billion, and these three sums bring the total additional cost of developing the A400M and producing 180 aircraft to ?31 billion. In 2003, Airbus Military signed a fixed-price development plus production contract worth ?20 billion.

The stop-work threat issued by Enders was partially linked to the pressing need to close off the EADS corporate accounts for the 2009 financial year. They are due for publication next month, and the company must make provisions to cover the A400M fiasco. But AIN understands that the ministers have told EADS that the rescue package cannot be finalized before March. Three weeks ago, Enders told journalists that the project could “eventually jeopardize the whole of Airbus. I will not go down that road.”     

Meanwhile, Airbus Military said that the first A400M (MSN1) had flown seven times, with no unexpected aerodynamic tendencies experienced. The aircraft has reached 34,000 feet, Mach 0.72, and the envelope has been explored from the stall to 300 knots IAS. MSN1 is now on the ground for a few weeks, while data from the early flights is reduced and assimilated. MSN2 is due to joint the flight-test program soon, and MSN3 is in final assembly at Seville.