Defence industry

A400 Million Buyers Want "Rapid" End To Talks With Airbus

DOW JONES NEWSWIRES , 05.02.2010

The seven governments behind the troubled Airbus A400M military airlifter program Friday called for a "rapid conclusion" to their negotiations with the military aircraft division of European Aeronautic Defence & Space Co. NV (EAD.FR).

In a joint statement, the defense ministers of the seven client countries--the U.K., France, Germany, Spain, Belgium, Luxembourg and Turkey--said they have agreed to adjust the timing and technical aspects of the delivery schedule, but didn't give details.

The EUR20 billion A400M program is running more than three years late and has incurred billions of euros of extra costs due to development delays. The customers and Airbus have been haggling for months on sharing the financial burden necessary to keep the program alive.

The statement was released after a meeting of ministers from the seven countries in Istanbul Thursday.

The statement said Airbus "must assume its responsibilities regarding the program and respect the commitments that it has made to the (client) countries."

The ministers "confirmed their decision to pursue the A400M program, which responds to the capacity needs of the countries, and constitutes a core part of Europe's technological know-how as well as a decisive impulse to Europe's defense and security policy," the statement said.

It went on to say that "major progress" had been made in a series of meetings between defense ministry experts and Airbus in recent weeks. The governments have set a deadline of reaching a binding agreement in three weeks.

French Defense Minister Herve Morin said Thursday that his government is urging the A400M partners to pump extra funding of up to EUR1.5 billion into the program, on top of the EUR2 billion they had already earmarked.

The sum falls short of the more than EUR6 billion that Airbus considers necessary for the survival of the program, however.

Morin said France is prepared to extend a repayable loan of EUR400 million, with the other governments that have ordered a total of 180 aircraft also providing financing.