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Jan 13, 2010

European aerospace CEOs warn of need for funding deal on A400M programme

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The A400M military transport aircraft programme cannot continue without a “significant financial contribution” from the countries that have ordered the aircraft, Airbus CEO Tom Enders warned on Tuesday, while speaking at a function in Seville, Spain.

In an otherwise very upbeat presentation of the company’s successes during last year – production and delivery of a record 498 commercial aircraft, plus 16 military aeroplanes – and prospects for this year, Enders affirmed that if “we look forward into 2010 and the  challenges we are going to face, one issue stands out right now: the A400M and the financial solution we urgently need to find together with our government customers .... Otherwise we would eventually jeopardise the whole of Airbus (and maybe even EADS), our ability to innovate and modernise our product offering and, hence, our competitiveness.”

At the same function, EADS (which owns Airbus) CEO Louis Gallois reported that the A400M programme was costing his group between €100-million and €150-million ($145-million and $217-million) each month. “We cannot continue beyond the end of January without knowing where we are going financially,” he warned. “I am sending a message of urgency to governments. We are ready to negotiate at any time.” The A400M programme is running two years late and has inflicted a shortfall of €2,4-billion  upon EADS.

Gallois admitted that EADS had erred “in accepting a fixed price contract on a programme  with huge technical challenges and an unrealistic schedule,” and argued that there were “responsibilities on both sides .... It was the nations who pushed the production sharing between countries, including some choices with engines. We must find a solution for sharing the burden with them ... if we want to protect the capacity of the group, we can’t add losses to losses without clear limits.”

Enders assured that Airbus, together with EADS, wants to continue the A400M programme.  The programme has been efficiently reorganised, and the company has been completely open to its customers regarding the financial and technical status of the A400M. “We know from flight testing so far that we have indeed a great plane under development,” he highlighted.

If the A400M programme is cancelled, Enders said that the resources assigned to it, in particular the engineers, would be very quickly redeployed to the A350 XWB airliner and other Airbus programmes.

Edited by: Creamer Media Reporter
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