Airbus may scrap €20bn A400M transport project

Airbus has signaled that it might abandon the delayed €20bn A400M military transport project. The news comes after German newspapers reported that Airbus has drawn up contingency plans to scrap the A400M after months of inconclusive talks with seven European NATO buyers.
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Scrapping the deal could trigger repayments of more than €5bn in government advances to nations that first commissioned the troop and heavy equipment carrier - Germany, France, Britain, Spain, Belgium, Luxembourg and Turkey.

The A400M’s maiden flight last month was two years behind schedule following delays in engine development and other snags that manufacturers blame partly on political interference.

Airbus parent EADS has asked buyers to come up with funds for increased production costs, but Germany has until now ruled out making concessions either on volume or price.

A German Defence Ministry spokesman said the country is sticking with its plans to buy the A400M military transporter and wants an agreement with manufacturer Airbus by the end of January.

Negotiators say EADS has asked NATO buyers to contribute €5.3bn ($7.66bn) of extra funds for producing the A400M and offered to bear a similar increase in development risks, of which €2.4bn has already been provisioned.

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