Germany To Take Only 40 A400Ms

[Guest]

FRANKFURT — Germany plans to further reduce the number of Airbus Military A400Ms its air force will operate. The Bundestag’s budget committee is expected to follow a proposal made by the ruling coalition to use only 40 of the 53 A400Ms the country plans to order.

The issue is on the committee’s Jan. 26 agenda. Juergen Koppelin, a high-ranking member of the liberal Free Democratic Party, says 13 aircraft will be returned to Airbus for export sales.

Germany is the last A400M launch customer to commit to the details of a compromise formed in early 2010. As part of the basic agreement, the country reduced its order to 53 from 60 aircraft. The deal includes a €2-billion ($2.7-billion) price hike for the first 180 aircraft and a €1.5-billion prepayment that Airbus Military is to return to the governments as export revenues come in, starting with the 185th aircraft.

In return, the A400M launch customers agreed not to cancel more than a total of 10 of the original 180 orders. A reduction of 20 aircraft would far exceed the agreed upon limits and threaten the compromise.

Thus, Germany will buy 53 aircraft but give 13 of them back to Airbus for remarketing.

That plan is almost certain to meet with resistance from the manufacturer and other A400M customers. Airbus would have to compete for export contracts with aircraft that were part of the launch order. While the company would still be required to start paying back the €1.5-billion facility to governments starting with the 185th aircraft delivery, that mark would be reached later if the 13 German transports were sold ahead of any new aircraft. Also, new industrial workshare issues could emerge based on the reduced German contingent of 40 aircraft.