Key elements of the A400M European airlifter contract are still not agreed between the partner nations and the aircraft's builder, the Airbus Military Company (AMC).

In a less than overwhelming display of European unity, only the British and French defence ministers, out of the eight countries hoping to make the troubled aircraft the centre piece of the continent's rapid reaction force were able to make it to Le Bourget yesterday, with Italy's new government still being formed and Germany's Rudolf Scharping noticeably absent from the platform in the air museum.

France, Britain, Belgium, Spain, United Kingdom, Germany, Turkey and Luxembourg have all signed a memorandum of understanding committing themselves to strive to achieve a satisfactory contract "by September" to buy 212 aircraft, down 13 from the numbers proposed at last year's Farnborough air show. Portugal is still going through its approval process and did not sign yesterday.

French defence minister Alan Richard says "timing of payments" and other financial issues, including the price, are still being negotiated with AMC. UK defence Secretary Geoff Hoon says that eventually the "MOU merry go-round" will have to stop and alternatives be considered, although he is up-beat that the A400M will eventually be built.

AMC executives were predicting three months of tough negotiations. Alberto Fernandez, head of EADS military transport division, says the governments want "rock bottom" prices and "as late payments as possible" on the $16 billion programme. He says that the Airbus partners companies are expected to pay 25% of the development cost, which they will have to find from their own resources. These costs will be recovered from export profits.

Source: Flight Daily News