Can the Airbus A400M Transport Be Saved?

When the subject of the military transport plane A400M comes up, the reaction from Airbus CEO Thomas Enders is less than enthusiastic. "We want to build the plane," he told Spiegel Online at the just-ended World Economic Forum in Davos. "But not at any price."

It is a comment that could be interpreted as a change in direction. Until now, Airbus and its parent company EADS have consistently denied rumors that the project was in danger of being mothballed. But the gigantic plane has long been plagued by equally gigantic problems, leading to exploding costs, frayed nerves and incessant delays. The tune now, as Enders is whistling it, is that Airbus needs to see that the project can still be successful.

It's not just Airbus itself that is losing passion for the project. Patience is likewise wearing thin at Germany's Defense Ministry, which has ordered 60 of the jumbos. The ministry, headed up by Franz-Josef Jung, refuses to comment on the record. But a high-ranking air force officer told Spiegel Online that "the way Airbus is dealing with the problem has generated little enthusiasm in the Defense Ministry."

The "problem" mentioned by the officer is an ongoing series of difficulties that awakens memories of the delay-plagued introduction of the passenger jumbo A380. The first A380 was finally delivered to Singapore Airlines in October 2007 after extensive difficulties with the planes wiring and other problems. The company lost billions of euros in earnings as a result.

The same fate seems to have befallen the A400M. There are troubles with the software that controls the planes engines. The steering mechanism has proven challenging. The propeller engines are too loud. And the entire thing is too heavy, as Enders himself admits, before adding that excess weight is a common challenge for new plane models. According to the Süddeutsche Zeitung, the plane has to shave off fully 12 tons.

The result has been major delays costing billions of euros. Originally, the first planes were to be delivered this year. Now, the German air force fears that it could be 2014 before the first A400M arrives. That, said Lieutenant General Klaus-Peter Stieglitz in the Financial Times Deutschland, would be a "disastrous development."

Inside the Defense Ministry, alternatives to the A400M are already being looked into. "We aren't married to Airbus," said the high-ranking air force officer who spoke with Spiegel Online. He said the German military could live with a delay of "one or two years" by continuing to fly its old fleet of C-160 Transall cargo planes. "But at some point, we will have to decide what to do if the plane from Airbus continues to be delayed."

Were the German military to cancel its order, it would be difficult for the project to survive. Germany is the plane's largest customer, accounting for 60 of the 190 orders that have been placed.

But Airbus too is weighing its options. "The way things are going now, it makes no sense to continue. Period," Enders said. He would like to renegotiate conditions agreed to with OCCAR, the defense consortium which counts Germany, France, Great Britain, Italy, Belgium and Spain as its members. "I hope that we can begin talks in March," Enders said.

The point of the negotiations would be to take a close look at a number of technical specifications that, according to Enders, need to be changed or eliminated altogether. Most important, though, is taking a new look at finances. The biggest problem facing Airbus are the fixed prices that were established with the project began—prices which, given the expensive problems and delays so far experienced, are far too low. "It was idiotic to sign back then," the Airbus CEO says openly. Such a project, he continues, always has hidden risks.

In addition to the enormous development costs, the company will have to pay high penalties as a result of delayed deliveries. EADS has already set aside €1.7 billion for the payments.

The A400M was scheduled to take off for the first time last summer. Enders, though, is unwilling to take the full blame for the fact that the cargo plane remains grounded. "We could have flown the plane in October if we had the engines," he said. But they are being developed by a consortium made up of the French manufacturer SNECMA, Rolls Royce from Great Britain, ITP from Spain and the German company MTU Aero Engines. "It wasn't the preference of Airbus," Enders says of the cobbled-together team. Rather, it was a political decision to make the project a European one.

Still, Enders believes that the technical difficulties encountered by the project can be overcome. He says that, when compared to comparable military projects, the current state of the A400M is hardly out of the ordinary. And once it is complete, the aircraft will be "a good plane"—one that is "far ahead of other, comparable models." In projects of the magnitude of the A400M, Enders said, it is normal to run into problems.

Germany's Defense Ministry is also aware that building a new cargo plane isn't always as straightforward as it looks on paper. The high-ranking air force officer emphasizes that there are other airplane manufacturers out there—in Russia or the US for example. "But they too would have to start at the beginning once the orders came in."

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