June 13, 2019 / 4:03 PM / 2 months ago

UPDATE 2-Airbus agrees new contract for delayed A400M military transporter

(Adds confirmation from Airbus)

PARIS, June 13 (Reuters) - Airbus has reached an agreement with European state buyers to revise a contract for its delayed A400M military transporter plane, resetting Europe’s largest defence project after a lengthy wrangle over costs and military capability.

Airbus said on Friday it had signed an A400M contract amendment with arms procurement agency OCCAR, which coordinates the A400M purchase for seven core nations, to lengthen the model’s production plan while sticking to the programme’s overall contractual timeframe until 2030.

Dirk Hoke, Chief Executive Officer of Airbus Defence and Space, said: “The overall aim... both for Airbus as well as for OCCAR and the Launch Customer Nations, was to recover a sustainable contractual basis for, and to ensure a proper execution of, the A400M programme.”

The A400M was commissioned in 2003 to give Europe an independent airlift capacity to support military or humanitarian missions, rather than relying on the Lockheed Martin C-130 or the now out-of-production Boeing C-17.

A 3.5-billion-euro bailout from Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey rescued the programme from cancellation in 2010 after delays and cost overruns.

But problems remained with some of the plane’s classified defensive systems, as well as some types of paratrooper drop and helicopter refuelling, prompting a new set of contract talks.

Industry officials blame some of the project’s problems on an over-ambitious wishlist from the seven purchasing countries, designed in some cases to support local jobs. But the largest buyer Germany has criticised Airbus for failing to do what it promised.

The buyers had already agreed that Airbus would need more time to deliver the plane than originally planned and in return, Airbus pledged to provide “all necessary support and resources” to the A400M programme.

Despite being a transporter plane, designers say the A400M’s advanced systems such as ground-hugging technology make it one of the most complex military aircraft ever built in Europe. France has praised its performance on operations in Africa.

Even so, Europe’s new troop transporter may never go into battle with all its planned military capabilities after buyers agreed to let Airbus negotiate an opt-out for features deemed too complex, a document revealed last year. (Reporting by Tim Hepher, Andrea Shalal Editing by Michel Rose, Geert De Clercq and Kirsten Donovan)

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