Crisis meeting in Berlin on Airbus A400M: Germany

AEROSPACE

Report says EADS responsible for A400M cost overruns
Frankfurt (AFP) Jan 20, 2010 - An independent report on the Airbus A400M military transport project has laid blame for delays and cost overruns with directors of parent company EADS, a report said on Wednesday. Auditors from Pricewaterhouse-Coopers (PwC) concluded that the plane maker "considerably under-estimated on a permanent basis the actual costs of the A400M project," the German business daily Handelsblatt said. The European Aeronautic Defence and Space Company (EADS) has asked seven countries that ordered the military transport plane to cover 5.2 billion euros (7.4 billion dollars) in unanticipated costs. But according to PwC, EADS has the resources to cover the overruns itself up to a limit of 7.6 billion euros. In 2003, the A400M programme was given a budget of 20 billion euros for 180 aircraft, but development ran into problems and the plane needs an estimated 11 billion euros more for production to be completed successfully. On Thursday, a crisis meeting is scheduled in Berlin with representatives from Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey, the client countries, and EADS directors on how to share the extra costs.

China Southern says will buy 20 Airbus A320s
Shanghai (AFP) Jan 21, 2010 - China Southern Airlines said Thursday it had agreed to buy 20 Airbus A320 jets, and expects to return to profit in 2009 due to falling fuel costs and strengthening passenger demand. The catalogue price for each aircraft is 76.9 million dollars, but the actual payment will be significantly lower, the nation's biggest carrier by fleet size said in a statement. Under the agreement signed Wednesday, the planes are due to be delivered from 2011 to 2013, the carrier said in a statement to the Shanghai Stock Exchange. The acquisition will increase capacity, "thus enhancing the competitiveness and core competence of the group," it said. China Southern said it would return to profitability for 2009 after posting a net loss of 482.9 million yuan (70.7 million dollars) in 2008. The carrier did not give specific figures for 2009 earnings in the preliminary announcement. It is due to release its full 2009 financial results in April. Shanghai-listed shares of China Southern ended the morning session up 0.81 percent at 6.23 yuan, compared with a 0.28 percent dip in the benchmark Shanghai Composite Index.

by Staff Writers
Berlin (AFP) Jan 21, 2010
Representatives from seven cash-strapped NATO powers were set to reconvene in Berlin on Friday for a second day of talks aimed at finding a way forward for the troubled A400M military transport plane.

The seven countries have ordered 180 of the aircraft for 20 billion euros (28 billion dollars) from European plane maker Airbus but the project is three years behind schedule and a reported 11 billion euros over budget.

Airbus, Boeing's arch rival owned by aerospace giant EADS, has threatened to pull the plug unless the seven countries -- Germany, France, Spain, Britain, Belgium, Luxembourg and Turkey -- stump up more cash.

France has indicated that it is ready to pay more, as long as others follow suit, but Germany is seen as more reluctant. Berlin has ordered 60 of the aircraft and France 50, and are the two biggest customers.

"We want the A400M, but not at any price," German Defence Minister Karl-Theodor zu Guttenberg said in an interview with the Bayernkurier paper to appear on Saturday. "Our willingness to compromise has its limits."

The meeting will take place at the German defence ministry and include state secretaries from the seven countries plus unnamed industry figures.

Talks on the A400M on Thursday broke off with apparently no deal in sight and a ministry spokesman said they would restart on Friday morning.

The heads of Airbus and EADS earlier turned up the heat on the seven nations to pledge more money to the project by the end of January, warning that the fate of the European aerospace giant depended on it.

Airbus has 52,000 employees around Europe, with about 10,000 working on the A400M, a state-of-the-art new aircraft that can carry troops, armoured vehicles and helicopters which would replace Europe's ageing fleet of transport planes.

earlier related report
Airbus A400M needs extra 5.2 billion euros: report
Paris (AFP) Jan 21, 2010 - The Airbus A400M military aircraft programme needs an extra 5.2 billion euros (7.3 billion dollars), a French news website reported on Thursday ahead of scheduled crucial talks on the troubled project.

Citing a source close to the negotiations, latribune.fr said Airbus parent group EADS (European Aeronautic Defence and Space Company) was ready to pay 800 million euros of the extra cost for the multi-billion euro programme.

At a meeting in Berlin with partners in the A400M, Airbus management "told them, according to a source close to the talks, that it was ready to pay 800 million euros out of the 5.2 billion in extra costs," the report said.

Contacted by AFP, EADS declined to comment on the report.

Representatives from seven cash-strapped NATO powers were set to reconvene in Berlin on Friday for a second day of talks aimed at finding a way forward for the heavily delayed and over-budget A400M programme.

Previous reports said A400M may need as much as 11 billion euros more.

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