Airbus Military has cleared a key hurdle to pursuing further business with South Africa by refunding pre-delivery payments on an order of eight A400Ms cancelled two years ago.

The undisclosed refund to Armscor, the official weapons trader for South Africa's military, allows Airbus Military to offer the A400M or other transports to its former customer.

Reacting to cost overruns and schedule delays, South Africa cancelled the order in November 2009 after joining the programme as a full industrial partner four years earlier. At the time, South Africa intended to claim a R2.9 billion ($379 million) refund, but negotiations dragged on for two years.

Meanwhile, other competitors emerged to fill South Africa's requirement for a new tactical airlifter. Lockheed Martin has said South Africa is a prime candidate to buy the C-130XJ, a lower-cost variant of the tactical airlifter.

However, South Africa still has close links with the A400M programme. Denel Aerostructures and Aerosud are still members of the A400M supply chain, producing aircraft top shells, wing-fuselage fairings, wingtips, insulations and galleys, Airbus said. Cobham South Africa also builds the A400M satellite communications antenna in Cape Town, Airbus added.

Airbus Military is struggling to complete the A400M's flight-test schedule. Type certification has been delayed by up to three months to the second quarter of next year because of engine problems and performance shortfalls.

The first A400M is scheduled to be delivered in March 2013 to France, according to contract requirements. The first French aircraft, MSN7, is in final assembly, said EADS.

Airbus Military has planned to increase production to up to 2.5 aircraft per month in 2015. Eight countries have signed orders for a total of 174 A400Ms.

Source: Flight International