The EADS-led A400M airlifter has suffered its first orders blow since the programme ran into development difficulties, with South Africa having cancelled its order for eight of the aircraft.
Confirmed on 5 November, South Africa's decision comes after deliveries of the Airbus Military product have fallen around three years behind schedule.
The South African government says the decision was taken during a meeting in Cape Town on 4 November, and that its action was informed by an extensive review into the troubled acquisition.
© Airbus Military
South Africa was to have received eight A400Ms, starting from 2010
"The termination of the contract is due to extensive cost escalation and the supplier's failure to deliver the aircraft within the stipulated timeframes," the government says in a statement.
"Cabinet believes that the interests of the South African taxpayer will be best served by not proceeding with the contract," it continues, adding that state-owned armaments company Armscor "will be instructed to terminate the programme as soon as possible".
South Africa intends to claim R2.9 billion ($379 million) in compensation, it adds.
South Africa ordered the A400M to replace its air force's aged fleet of eight Lockheed Martin C-130Bs. First delivery had been scheduled to take place in 2010.
Airbus Military launched the A400M programme with an order for 180 aircraft from Belgium, France, Germany, Luxembourg, Spain, Turkey and the UK. South Africa's cancellation decision slashes its export commitments for the type to four aircraft for Malaysia.
"Airbus is surprised by the announcement by the government of South Africa to cancel its order for eight A400Ms," the company says. "We very much regret such an announcement, especially at a time where the programme is making very good progress towards first flight before the end of this year. Airbus Military is now studying the possible financial impact."
Additional reporting by Max Kingsley-Jones in Toulouse