Britain, France Aim To Solve Airbus A400M Row

[youngindian]

By AGENCE FRANCE-PRESSE
Published: 6 Jul 2009 14:21

Britain, France Aim To Solve Airbus A400M Row - Defense News

EVIAN, France - Britain and France said July 6 after a summit in southeastern France they were looking to resolve a row on the long-delayed Airbus A400M European military transport jet project.

The two are "committed to finding a positive resolution to renegotiation of the A400M program," said a joint statement issued after talks between French President Nicolas Sarkozy and British Prime Minister Gordon Brown in Evian.


Deliveries of the first A400M were scheduled for the end of 2009 but that has been pushed back to 2013 at the earliest due to delays in building the engines and there had been fears that Britain would drop out of the project.

Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey had until April 1 to cancel their orders because of the delays but Airbus parent company EADS negotiated a three-month extension to present a new delivery timetable.

Prime Minister Gordon Brown told reporters after the July 6 summit that he wanted to see the A400M and the A350 long-haul passenger jet projects proceed.

The summit statement said the two governments were "open" to continuing in their commitment to the A400M project "under reasonable conditions."

"The principle underlying this renegotiation is that the company in question will face the consequences of delays in the project and will compensate for the operational capacity deficit resulting from them," it added.

 

[youngindian]

UPDATE 2-A400M buyers to renegotiate troubled plane deal

Fri Jul 24, 2009

* Seven nations agree to renegotiate A400M plane project

* New meeting on delayed plane slated for October

* Britain agrees to enter renegotiation, softening stance

(Recasts after end of talks, adds EADS statement)

By Tim Hepher

CASTELLET, France, July 24 (Reuters) - European NATO nations agreed on Friday to renegotiate the cost and scale of a 20 billion euro defence contract with planemaker Airbus after technical problems and cost overruns plagued development of its A400M military plane.

The decision to open formal contract talks between a joint procurement agency and Airbus parent EADS (EAD.PA) ends months of prevarication over the future of Europe's biggest defence project, which involves upwards of 4,000 production jobs. "I am convinced this programme will be relaunched, which will be good news for the trade balance of our countries because I am convinced it has enormous export potential," French Defence Minister Herve Morin told a news conference after talks in southern France.

Britain, which had threatened to pull out of the project because of delays in supporting its operations in Afghanistan, has agreed to enter the renegotiation "on an equal footing" with it six partners, Defence Procurement Minister Quentin Davies told Reuters.

"I hope we can save the programme," he added.

Defence sources predicted this week that Britain would ease doubts over its future in the project [ID:nLM304006].

The A400M is a heavy transport aircraft designed to carry up to 32 tonnes of troops and equipment over distances of up to 8,000 km (5,000 miles).

Britain, France, Germany, Belgium, Luxembourg and Turkey ordered a total of 180 of the planes in 2003 in a record pan-European contract. Malaysia and South Africa ordered 12.

France was due to take delivery of the first plane in 2009 but EADS now says the earliest it can deliver a plane is 2013.

The first flight is expected at end-2009 or early 2010, two years late. Ministers said they would aim for broad agreement by mid-October and hope to sign a deal around the end of the year.

A new ministerial meeting will be in Germany in October.

UPDATE 2-A400M buyers to renegotiate troubled plane deal | Reuters

 

[youngindian]

EADS faces costly charges for A400M military transport

July 28 2009

EADS, the leading European aerospace and defence group, warned on Tuesday it expected its profits to fall in the second half of the year, even before it is forced to take costly but still unquantified charges for the debacle surrounding the development of the A400M military transport aircraft.

The A400M programme is already running at least three years late and has cost the group several billions of euros of extra costs.

The customer countries, led by France, Germany and the UK, agreed last week to resume negotiations with EADS with the aim of agreeing a new development schedule by the end of the year. The two sides have still been unable to set a date for the first test flight.

EADS said “substantial” extra charges may still have to be booked in future periods depending on the progress of the development and the outcome of the negotiations on the A400M.

The group’s results for the second half are shrouded by uncertainty, and it admitted “the range and magnitude of the potential A400M programme charge is wide”.

Louis Gallois, EADS chief executive, said the A400M was the biggest single risk exposure facing the group.

EADS said deliveries this year of commercial jets by Airbus should be “at least” at the record level of last year of 483 in spite of the impact of the recession, but new orders booked by Airbus this year have plunged.

In the first six months, Airbus received only 90 gross orders (68 net orders after cancellations) for commercial jets, an 83 per cent fall from the 525 (487 net) booked in the same period a year ago.

EADS is sticking to its target for Airbus to capture “up to 300 new gross orders” in the whole of 2009, but it admitted the goal was “challenging in the current market environment.”

Airbus is also still struggling to gain full control over the industrial production process for the A380 superjumbo, the group’s flagship range of aircraft and the world’s largest commercial passenger jet.

Nearly two years after the first A380 entered commercial service with Singapore Airlines, EADS said A380 costs were “still higher than expected” and were a continuing burden on results this year. Another review of the programme would be undertaken during the second half of the year.

In the first half, EADS operating profits fell 23 per cent from €1.16bn ($1.65bn) to €888m. Net profits fell 6 per cent to €378m. Operating profits in the second half before one-off charges would be “positive but lower compared to the first half of 2009.”

The group’s financial performance is being hit by rising research and development costs and a “significant deterioration” in the level of currency hedge rates, reflecting the weakness of the dollar against the euro. The price levels for Airbus deliveries have also been falling.

Shares in EADS were 3.7 per cent higher at €13.19 in afternoon Paris trading.

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