A400M 'cannot continue' without more funding, warns Airbus CEO

Source: Flightglobal.com
This story is sourced from Flightglobal.com

EADS chief executive Louis Gallois says the A400M programme cannot continue beyond the end of the month without a commitment by European customer governments to fund the increased costs of developing the military airlifter.

Speaking at an event in Seville today, Gallois said the European giant was spending between €100-150 million ($145-217 million) a month on the programme, which is running two years behind schedule. "We cannot continue beyond the end of January without knowing where we are going financially," he said. "I am sending a message of urgency to governments. We are ready to negotiate at any time."

a400m-inflight_13
 © Airbus Military

Gallois said EADS had made a "mistake in accepting a fixed price contract on a programme with huge technical challenges and an unrealistic schedule". He said there were "responsibilities on both sides" for the delay, which has left EADS with a shortfall of €2.4 billion.

"It was the nations who pushed the production sharing between countries, including some choices with engines," he said. "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."

However, Gallois refused to detail what EADS might do if no further agreement is secured by the end of the month. "Can you leave us room to negotiate with our customers?" he said.

Tom Enders, chief executive of Airbus, which now has direct responsibility for the Airbus Military business, backed his boss's threat. "We cannot continue without a significant financial contribution from our customers. If we don't press for that it will jeopardise the whole of Airbus. The A400M as it is set up today will put the whole of Airbus in jeopardy and I will not go down that road.

Pressure on defence budgets as a result of rising deficits has added to frustration over delayed deliveries among A400M customers, who include France, Germany, Spain and the UK, and politicians in all these countries have warned that taxpayers ought not to have to fund the rising costs of the programme.