A400M: Rumours of its possible death exaggerated

Airbus CEO Thomas Enders in Spiegel Online, March 30:

...
SPIEGEL: Your biggest worry is currently the planned A400M military transport aircraft, which has been in the news for months. Which countries could cancel as buyers in the future?


AP. The Airbus A400M military transport plane has still not taken flight.

Enders: Up until now, none have canceled. The A400M customers are currently examining the program, though. We'll see how it goes when this process is completed.

SPIEGEL: Germany is threatening to completely withdraw and France is considering reducing its order. It doesn't exactly look like a promising future ...

Enders: Objection! If we can manage to get the program back on course now, the A400M will be a success story. That is what we want -- but not at any price. In any case, we cannot build the plane under the conditions that we've had up to date.

SPIEGEL: Your company is also partly to blame for this development.

Enders: True. EADS should never have signed this contract. [emphasis added] Our American competitors would never have accepted such conditions. We've made big mistakes, and errors have also been made on the customer side. We should now rectify these together.

SPIEGEL: What are your demands on the governments? More money? More time?

Enders: We submitted a few proposals back in December. This basically concerns three issues. First, the A400M should be technically and economically organized like any other defense project, where the risks and opportunities are appropriately shared by the customer and the industry. This means, for example, that Airbus will no longer carry the risks alone of engineering the engine, because that is neither our job nor did we want things this way. In all other military programs, the engines are also handled separately.

SPIEGEL: And second?

Enders: Engineering, flight tests and the start of production have to be optimized chronologically in order to minimize the risks of series production. And third, studies need to be conducted to assess whether the A400M, which is designed to be more or less an all-rounder, really has to be able to do everything right from the start [emphasis added]. It could save everyone a great deal of time if some of the things this multi-talented aircraft is supposed to be able to do were only introduced step by step.

SPIEGEL: If no agreement can be reached, you will have to pay back billions of euros to your customers.

Enders: I assume that we'll find a solution with the governments. If not, then it would be a case of "better to make a painful break than to draw out the pain [emphasis added]," as the Germans say. In any case, I'm not going to traipse off to Berlin or Paris to ask for a continuation of the program under conditions that are unacceptable for us [emphasis added]...

A bit later, from the big boss:

EADS chief softens line over A400M

EADS is prepared to accept a limited cut in orders for the A400M military transport plane, in a bid to keep Europe’s biggest defence contract alive as government clients grow restless over rising costs and long delays.

Louis Gallois, EADS chief executive [Airbus is part of EADS], said for the first time that a limited reduction in orders would be “manageable” for the Franco-German aerospace group [emphasis added].

However, he said any significant cut would have “an impact on the price of the planes” – a clear signal to the seven governments that launched the troublesome €20bn project in 2003 that they should not push too hard for concessions.

Mr Gallois’ comments came as EADS sought to reassure customers and the market that it remained committed to the A400M programme, already €2bn over budget and three years late.

Doubts over EADS’s determination to continue with the programme were raised at the weekend by Tom Enders, head of the group’s aircraft arm Airbus, who suggested in an interview with Der Spiegel magazine that he would rather scrap the programme than continue under the current contract...

This month, the governments agreed to a three-month moratorium on cancellations from today to allow the talks to go on.

But talks come as the enthusiasm of some of the original customers – notably Germany and the UK – for the aircraft may be waning.

Mr Gallois said on Monday he was confident a solution would be found. The EADS chief appears to be betting that politicians will put pressure on defence ministries to resolve the disagreements over penalties to preserve jobs in a highly sensitive sector.

“This programme is going to fly because the defence and industrial challenges are considerable,” he said. “They need this plane and it is also about 40,000 highly qualified jobs in Europe. We have to find a solution together.”

Nonetheless, the UK government, which ordered 25 aircraft and urgently needs a new transport aircraft for operations in Afghanistan, increased pressure on EADS on Monday, warning it would “not be content with a gap in capability”.

John Hutton, secretary of state for defence, told MPs the delays were a “matter of extreme regret” that posed “very serious questions” about the future of the UK’s military logistics capabilities.

He said the government would decide whether to go ahead with the programme at the beginning of July but warned: “We will not be content with a gap in capability.” The UK is considering options to bridge the delivery gap, including extending the out-of-service dates of the ageing C-130 Hercules aircraft, and buying more C-17s from Boeing, the US jetmaker.

Mr Gallois said he expected Airbus to deliver a new timetable to customers after agreeing a delivery date for the propulsion system software, known as Fadec.

Slowly, slowly twisting...