A400M Delays Creating Contract Controversies
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Airbus’ A400M is a EUR 20+ billion program that aimed to repeat Airbus’ civilian successes in the military market. A series of smart design decisions were made around capacity (35-37 tonnes/ 38-40 US tons, large enough for survivable armored vehicles), extensive use of modern materials, multi-role capability as a refueling tanker, and a multinational industrial program; all of which leave the aircraft well positioned to take overall market share from Lockheed Martin’s C-130 Hercules. If the USA’s C-17 is allowed to go out of production, the A400M would also have a strong position in the strategic transport market, with only Russian IL-76 and AN-124 aircraft as competition. To date, 184 orders have been placed by Germany (60), France (50), Spain (27), Britain (25), Turkey (10), South Africa (8), Belgium (7), Malaysia (4), and Luxembourg (1); and Chile has expressed an unfinalized interest in 3 planes.
Right now, the firm’s biggest issue is timing. In November 2007, “Airbus A400M Program Delayed 6-12 Months” covered ongoing issues with Airbus’ new military transport. Those issues escalated, and project is currently under moratorium as all parties decide what to do. Cancellation is not a realistic contractual option for most customers, but late deliveries can be refused, giving both Airbus and its customers negotiating leverage in talks.
This DID Spotlight article covers the latest developments as the A400M project slides toward production. A key multinational agreement has now extended the program’s moratorium, but South Africa has pulled out, and Malaysia is announcing major delays…
- The A400M Program: A Snapshot
- The A400M Program: Airbus’ Dilemmas
- Updates & Key Events [updated]
- Additional Readings
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