Belgium, Spain upbeat on A400M

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Belgium’s defence minister says everything points to a deal on Europe’s largest defence project, the delayed Airbus A400M military transport, being reached by year-end as planned.
His comments come a day after similar hopes were expressed by his Spannish counterpart Carme Chacon.
Belgium and six other European NATO nations agreed earlier this year to renegotiate their contract with Airbus parent EADS to try to prevent delays derailing the €20 billion project.
“I’m an optimist. So far … all indications commit me to believe that we will be able to proceed,” Pieter De Crem told Reuters on the sidelines of a meeting of European ministers in Sweden earlier this afternoon.
European ministers are scheduled to meet in October to review progress toward an agreement.
The A400M project, which involves around 4,000 production jobs, has been hit mainly by delays in engine software development, forcing Europe’s largest aerospace group EADS to take €2.4 billion in charges on its balance sheet.
Belgium has ordered seven of the planes, as well as one further aircraft in cooperation with Luxembourg. In total, 192 aircraft have been ordered with Germany the biggest buyer.
Officials have said the Airbus parent could face a hefty bill to help fill gaps in troop transport capacity, not least for British and French operations in Afghanistan, while development problems are ironed out.
“For the time being, my mindset is not one of Airbus Military already being in a position under pressure or having fines,” De Crem said. “I am still, and I think most of my colleagues, on the positive side of the table. But this cannot last for another year or more.”
De Crem also sought to dampen expectations that European buyers of the aircraft would allocate extra funds to the project beyond what has already been agreed, calling this “an illusion” as defence budgets were scaled back in the economic downturn. “At least for Belgium, that is inconceivable,” he said.
Asked yesterday how optimistic she was about the outcome of that meeting, Chacon said, “A lot. Spain is very optimistic about our capacity to agree and co-operate in our goal, which is a strong policy for the European defence industry.
“At the end of this year we are going to be able to witness the first flight so we are really optimistic”.
The turbo-prop plane is being assembled in Seville, southern Spain.
EADS, shares in which were down 1% to €14.99, has said that even if the project goes ahead, it faces further substantial charges to purge remaining losses.
The A400M has been hit mainly by delays in engine software development.
Ministers agreed in July to seek a new contract by end-year and scheduled the October meeting to review progress.
Talks are so far said to have been proceeding slowly ahead of Sunday’s election which saw conservative Chancellor Angela Merkel headed for victory in a new coalition.
Germany is the biggest buyer, with 60 planes on order out of 180 originally commissioned by the seven NATO launch nations.
Britain pulled back in July from a threat to walk away from the project. But analysts said it could reduce its order for 25 aircraft or seek to spread its commitment over a longer period.
Other launch nations include France, Belgium, Luxembourg and Turkey.
A further 12 planes have been earmarked for exports to Malaysia and South Africa.



Pic: A400m MSN 001 with engines