Thursday, January 27, 2011

German Move Does Not Hurt A400M Program: French MoD

PARIS - The German parliament's decision to back a purchase of 53 A400M aircraft but sell 13 units into the export market keeps the military aircraft program on track but needs to be confirmed by the government, the French Ministry of Defense spokesman said Jan. 27.
"For the time being, this is an internal parliamentary process," spokesman Laurent Teisseire told journalists here. "This is a step, but we are waiting for the formalization by the German executive," he said.
"What seems very clear is that whatever the expression of the final requirement by the Bundeswehr, seemingly a reduction, the Federal Republic maintains a volume of orders that is coherent, compatible with the volumes agreed with Airbus in the agreement reached last year," Teisseire said.
The German parliamentary budget committee agreed Jan. 26 the government should buy the 53 A400M units, keep 40 and sell on 13 to third parties. This would ease strain on the defense budget and better reflected the real needs of the Bundeswehr armed forces, said Juergen Koppelin, budget expert for the Free Democrat (FDP) junior coalition partners to Chancellor Angela Merkel.
Britain has used a similar approach to buy Eurofighter Typhoon fighters and sell those no longer required by the Royal Air Force.
The German order of 53 aircraft is "important for the existence of the program" as it maintains the total A400M orders at 180 units, with a margin of 10 cancellations, Teisseire said.
That was the framework deal reached in March by Airbus and the seven anchor clients - Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey.
Asked whether there was concern over the sale of the 13 German aircraft into export markets, Teisseire referred to the welcome given by Airbus to the parliamentary decision.
Airbus Chief Executive Tom Enders said Jan. 26, "The decisive point for us is that Germany has agreed on an order of 53 planes, and therefore will take on the additional financing costs of 3.5 billion euros," Reuters reported.
Teisseire also referred to the estimated export market of 400 A400M units cited by the EADS Chief Executive Louis Gallois. EADS is the parent company of Airbus, which builds the A400M.
Thirteen aircraft "does not undermine the fundamentals of the market," Teisseire said, pointing to the long-term prospects for foreign sales.
French Defense Minister Alain Juppé fully supports the A400M program, just as his predecessor Hervé Morin did, Teisseire said. France maintains its order for 50 units, he said.
The A400M is of structural importance to French forces, an industrial project which federates European capacity and provides the capability to project power, Teisseire said. France is one of the first customers of the airlifter.
Germany had previously ordered 60 A400M units but cut that to 53 in November due to costs.
The March agreement, worth 3.5 billion euros ($4.8 billion), was needed because the A400M is three years late and Airbus demanded extra funds to cover the 5.25 billion euros of overrun.
The A400M, dubbed Grizzly, is in test flight, with four prototypes flying. First delivery is due in the first half of 2013. The plane is intended to contest the market for military transport planes held by Boeing and Lockheed Martin.

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