Airbus said buyers had agreed to work on contractual changes, including a ‘new roadmap’ for development and completion of capabilities for the A400M, in simple terms less promised capabilities are to be integrated and delivery is to be slowed.

Airbus had already taken a writedown of 1.2 billion euros one year ago after the A400M suffered engine gearbox problems and delays in fitting parachuting capacity and advanced defences. It is understood that Airbus has been urging partner nations to cap its exposure to fines caused by technical delays to the programme.

We understand that Airbus is expecting the rate of production to fall from 19 per year to 15 in 2018 and 11 in 2019 in order to help to extend the life of the programme and increase the chance of export sales.

“An increase to the Loss Making Contract provision on the programme, which may be material, is under assessment for the Full Year 2017 results which will be disclosed on 15 February 2018,” Airbus said in a statement.

“Since its inception in 2003, this programme has suffered not only from a number of operational issues but, more importantly, under a flawed contractual set-up and insufficient budget which resulted in significant losses for Airbus,” Airbus Chief Executive Tom Enders said in the statement.

“We have a good chance to stop or at least reduce the bleeding now and deliver the capabilities our customers need,” he added.

Airbus has also struggled to fulfil all of the capability requirements in the timeframe set by the contract, resulting in some capabilities appearing to have to be “re-negotiated”, i.e made more expensive and lengthy to integrate or not included on delivered aircraft. No specific details of this however have been made public.
According to the Financial Times, after software problems in 2009, A40MM Airbus chief Tom Enders threatened to close down the programme unless the contract were renegotiated. Again in 2016, the aircraft suffered gearbox problems that grounded most of the fleet and left Airbus with a €2.2bn impact on 2016 profits.

9 COMMENTS

  1. Unfortunately, having worked for an Airbus supplier, this is how they operate. Contracts are regularly changed “because we’re Airbus” with little or no notice. It’s a shame to see the operate in a similar fashion with their customers, ie “According to the Financial Times, after software problems in 2009, A40MM Airbus chief Tom Enders threatened to close down the programme unless the contract were renegotiated.”

  2. So, they’ve “agreed” that Airbus incompetence will continue to cost European taxpayers tonnes of money.

    I commend the Airbus lobbyists, they are playing a stormer.

  3. Its costing a fortune that could and would be better spent elsewhere. We don’t need 3 different transports with ramps. We need more a330’s as refuellers and cargo carriers and c17’s are twice as capable and Hercules half the price, if not less. Its a waste.
    Secure British jobs by buying more 35b’s or more frigates and destroyers. What about spending the billions on much needed new gen of IFV or tanks, or Apache E’s the list is very long.
    We did not need another, albeit great looking, transport with a ramp. It doesn’t do the economy of Hercules or the capacity of c17.
    Which as an example is why France is buying Hercules and borrows our C17’s every now and then.

    • France are purchasing A400M and they will have the ability to refuel other aircraft, something we can’t do without paying Airtanker who own our A330 Voyagers a small fortune. Bae, Airbus they are only in it for the money and to hell with the customer. I wonder who our enemies are sometimes but defence suppliers must be on the list somewhere.

    • Eh no. We need A400M as it offers a mid point capability between C-130J and C-17. You cant fit Ajax (base line configuration) or much else apart from cargo pallets in a C130J and the C-17s are few and far between and despite what the brochure says nobody wants to land one on anything but fully prepared airbase. When we had them on lease from the USAF the contract even stipulated no austere landings. So 8 C-17s and 14 C130Js are not enough transport capability but since we cant buy any more C-17s (no longer produced) and the C130 series no longer meets all the lift requirments what can be done except buy a new transport type, hence A400M. We are buying it because we need it and its the best option available. Also it would take a lot more money than is being spent on A400M to fix the army.

  4. Considering the US Airforce was forced to buy more C17’s than it needed, we should negotiate for 4 additional secondhand aircraft.

    The 14 C130’s play an important role as feeders and especially have a vital role in special forces support.

    The A400’s fit between the two beutifully and will offer great capability when all the wrinkles have been ironed out.

    As David said, we really do have no choice but to fully commit to the A400.

  5. The A400 is another budget percentage consuming project. The decision to go with it was made long before the C17 line was shut. I remember the sales pitch was once made that it was going to replace all the C130’s. Strange how thats now been dropped. We don’t need it and it drains resources sorely needed elsewhere.
    Its a great looking plane but odd that the US, Australia and Canada amongst others simply don’t need it.

  6. […] Recently, Airbus said buyers had agreed to work on contractual changes, including a ‘new roadmap’ for development and completion of capabilities for the A400M, in simple terms less promised capabilities are to be integrated and delivery is to be slowed. […]

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