Business

Final deal to build Europe's A400M military plane

  • 5 November 2010
  • From the section Business
A400M
The A400M is over-budget and behind schedule

European governments have agreed a final funding deal for the 20bn euro (£17.3bn) programme to build a new military transport aircraft.

The A400M, built by aerospace firm EADS, has been dogged by uncertainties over technical specifications and pressure on defence budgets.

The seven launch customers are the UK, France, Germany, Belgium, Luxembourg, Spain and Turkey.

The defence project, one of Europe's largest, will create 10,000 jobs.

"The A400M is an emblematic programme which Europe could not abandon," Herve Morin, the French defence minister, told a news conference.

"Giving it up would have meant Europe saying it wanted to be dependent on the United States in the 21st century."

Cutbacks

The buyers will take a total of 170 planes, instead of 180 initially planned when the project was launched in 2003.

Britain has cut its order by three planes to 22. Germany will take 53 planes instead of 60 and forgo special technology that allows for low-level flights.

While the overall cost of the project remains broadly unchanged from a deal reached in March, the agreement calls for a price increase per plane of 11m euro, for a total of just under 2bn euro, and a further 1.5bn euro provided by credits against future exports.

Each nation must adopt the accord before it can be signed formally, which EADS hopes will happen by the end of the year.

In January, EADS boss Tom Enders had told the BBC that he would cancel the project if governments failed to provide more money.

The A400M's wings are made in Filton near Bristol, employing more than 800 people.

Landing gear comes from Messier-Dowty, whose Gloucester factory keeps nearly 1,000 aerospace engineers in work.

The project is three years late and at least 5bn euro over budget - or more than double that according to some calculations.

Related Internet links

The BBC is not responsible for the content of external Internet sites