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Airbus A400M Needs States’ Help to Continue
Dec. 11 (Bloomberg) -- Airbus SAS’s A400M military transport, which performed its maiden flight today in Seville (see photo right), isn’t viable without a “significant contribution” from government customers, the planemaker’s chief executive said.

Airbus Chief Executive Tom Enders said his company’s first military plane and thousands of jobs connected with depend on the governments’ willingness to step up funding. The A400M, which is being assembled in Seville, Spain, is already suffering 2.3 billion euros ($3.4 billion) in cost overruns. “We certainly hope that with thousands and thousands of employees all over Europe that we can continue this program, but we need to do that on a financially sound basis,” Enders said in an interview today with Bloomberg Television.

Airbus and government representatives sought to use the maiden flight as a way to overcome a deadlock on negotiations that has put in doubt the future of the 20 billion-euro project. Construction of the A400M is sapping engineers and money from Airbus, while the governments who ordered the plane have few alternatives they can tap for military or humanitarian missions.

Airbus parent European Aeronautics, Defence & Space Co. has requested about 5 billion euros in additional funding toward the plane, German Deputy Defense Minister Christian Schmidt said earlier this week.

“I am not confirming numbers,” Enders said. “What I can say is in order to continue the program we need a significant contribution from government customers.”

Representatives of Germany, France, the U.K. and the four other countries that first placed orders for 180 of the transporters watched the plane take off about 10 a.m. local time and then moved to a site near the airplane hangar to continue negotiations on pricing. The plane landed just after 2 p.m.

The governments that ordered the A400M harmonized their demands at a meeting in Seville today, German Deputy Defense Minister Ruediger Wolf said in an interview. They have until the end of January to study EADS’s response to a letter detailing the client’s demands. Germany’s plan to order 60 of the transport planes is unchanged, he said.

French Defense Minister Herve Morin, also on site in Seville to see the plane, reiterated that France is eager to find a solution that will enable the A400M to go forward. “We’re looking for a solution that will allow us to soak someone else share the costs and move forward,” he said.

The original 2003 contract was no longer valid after April when Airbus missed a deadline for the first test flight. Since then governments have been negotiating with Airbus toward an amended contract. Airbus says it needs governments to shoulder more of the costs, while the countries that ordered the A400M are at odds over how much more they’re willing to contribute.
Posted by: Steve White 2009-12-16
http://www.rantburg.com/poparticle.php?ID=285751