Enders warns A400M is 'Damocles' sword' for Airbus
The Airbus chief executive has said the company's troubled military aircraft program could cost the European aerospace firm billions of euros extra unless its customers agree to reduce damages for delays.
In an interview for Friday's edition of the Financial Times, Airbus CEO Tom Enders said the company's A400M customers could not force Airbus to "indefinitely carry" the financial risk and burden from the military plane program.
The European aerospace behemoth is reportedly facing penalties of up to one billion euros ($1.6 billion) from the governments of Germany, Belgium, France, Britain, Luxembourg, Spain and Turkey, who commissioned the military transport aircraft in 2003.
But the project has run into substantial delays due to a string of technical problems and different requests from the governments, likely resulting in massive damages.
"There is a huge financial Damocles' sword hanging over us in terms of these damages," Enders told the British business daily, adding that these could amount to "very serious money, and we're talking here potentially about billions."
New deal?
Originally planned for 2011, the plane's launch was delayed until 2013. Since then, Airbus has delivered 11 A400Ms in 2015, 17 in 2016, and two of the military transport planes so far this year.
However, the aircraft being delivered still have to be equipped with all the functions that were promised on a revised timetable agreed between Airbus and the governments in 2010. Under the agreement, the company also received a bailout of 3.5 billion euros to resolve the plane's problems.
As Enders is seeking the "cooperation from clients" to push the program forward, the good news is that, unlike in 2010, the aircraft could now be used operationally. The aircraft was "one of the most sophisticated military aircraft of recent times," he told FT.
"It's a really multi-mission aircraft," Enders was quoted as saying. "Long range, logistical transport, tactical air lift on the battlefield, plus tanker aircraft."
While Spain has already invited Enders for talks on the A400M, other customers may be more reluctant to make new financial concessions. The German government, for example, urged Airbus last week to live up to its contractual obligations, after the aircraft maker unveiled a profit plunge for 2016 due to charges related to the A400M.
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