Airbus Removes Military Aircraft Chief as A400M Stumbles

Airbus Group NV appointed a new executive to lead the company’s military aircraft unit after its A400M military transport faced repeated delays and quality shortfalls.

Fernando Alonso, head of flight test operations at Airbus, will now run the unit, the company said in a release, with Domingo Urena-Raso, a 32-year veteran of the Airbus Group, stepping down from the post to take a new, yet-to-be announced position.

Development of the A400M has been burdened by delays and cost overruns amid challenges in developing the giant turbo-propeller-powered engine and trouble integrating various systems. The aircraft is running more than 5 billion euros ($5.6 billion) over budget at 25 billion euros and in service with the Turkish, French German and U.K. armed.

“As for the integration of military capabilities and the industrial ramp-up in particular, we have not been performing at the level which had been expected from us,” said Bernhard Gerwert, chief executive officer of Airbus Defence and Space. “That is unacceptable and we will fix that.”

Airbus will review the financial fallout from a revised delivery schedule, with some military capabilities -- such as air-to-air refueling with pods and the cargo handling system -- being integrated only in the second half of this year and additional capabilities only added by 2018. The company will disclose its findings when it releases earnings on Feb. 27.

New Team

Program responsibility is also being restructured. All industrial-related activities will shift to the operations organization, led by Pilar Albiac-Murillo. Program-related areas such as customer deliveries will remain in the scope of the military aircraft business unit, under Rafael Tentor, who is head of the A400M program.

Alonso will take the position from March 1, with Gerwert acting as interim head of military aircraft.

Airbus has booked 174 orders for the A400M, with Malaysia its only export customer beyond the group of six European countries and Turkey that backed its development.

Customers including Germany and the U.K. have cut the number of A400Ms they are taking, and further cancellations are possible. Customers have had the right since November to terminate contracts, though Airbus has said that it is highly unlikely they would act on this right.

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