EADS running out of patience on A400M refinancing

London
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EADS is warning the Airbus Military A400M customer nations that time is running out to save the troubled airlifter, which programme sources say is costing the company more than €100 million ($143 million) a month to sustain.

"We are negotiating," says EADS. "We cannot take the burden all alone. We need to share the burden."

Sources close to the programme rate the chances of a refinancing deal for the A400M being agreed before EADS's end-of-January deadline at "50:50".

The project, running around two years late with the prototype having finally achieved its maiden flight in December, requires another €11.4 bllion of funding to complete. EADS has already made a €2.4 billion provision, leaving additional costs of around €9 billion that need to be covered by the seven partner nations and industry.

 a400m-inflight_13
 © Airbus Military

EADS declines to comment on reports that it is seeking another €5.3billion from the nations. Representatives of the customer nations will reportedly meet EADS officials for further talks in London on 15 January.

Germany, the biggest A400M buyer with an order for 60, has taken a hard line, warning it is not prepare to contribute more than a further €650 million to cover inflation and surcharges, as set out in its contract. France and the UK have taken a more conciliatory approach, saying that they expect deal to be reached to continue the programme.

Meanwhile, development aircraft MSN001 logged its third flight on 7 January, completing a 2h 25min sortie.

“We made considerable progress in further exploring the aircraft’s behaviour in different configurations and were pleased with what we saw,” says Airbus head of flight operations Fernando Alonso.

The A400M’s operational flight envelope has been cleared during MSN001’s 9h 20min of flight activity so far, and Airbus says “the rhythm of flight testing is expected to increase substantially in the coming days”.

Additional reporting by Craig Hoyle