Report downbeat on A400M export hopes: German Def Min


Export potential for the Airbus A400M military transporter plane may be more than a third lower than parent company EADS is planning, a report delivered to Germany’s parliament shows.

A study by auditors PriceWaterhouseCoopers (PWC) concluded the export potential of the A400M would be around 280 planes, according to documents presented to parliament by the German Defense Ministry obtained by Reuters.

EADS rejected the number as far too low. “We’re sticking to our assessment of the market of between 400 and 500 planes no matter what a consultancy firm says,” a spokesman for EADS said.

The report follows a deal earlier this month to secure a 3.5 billion euro bailout for the troubled aircraft, which has been hit by delays and disputes between the company and the seven buyer nations over how to finance the project.

Some 1.5 billion euros of that sum is a loan from the buyer nations to Airbus, whose repayment is coupled to demand for the aircraft. If sales are disappointing, tax payers may end up sitting on a hefty bill, the report showed.
“If the number of A400Ms exported falls short of expectations, the federal government carries the risk of default for the remainder of the (German part) of the loan,” it said. The ministry documents showed that a dispute over a price adjustment clause in the A400M contract had not been resolved.

EADS had not been able to show that the current clause put it at a disadvantage, it said. “The deadline for proving this has been extended till the end of December 2010,” it added.

Germany aims to take delivery of the A400M between November 2014 and 2020. A basic version of the plane should be available from June 2012 and reach its standard form in December 2018.

Planes delivered ahead of this date are due to be equipped to the standard form by EADS at its own expense. But this did not mean there would be any additional delay in A400M delivery, a spokesman for the German defense ministry said.