A400M faces first flight, uphill battle

BERLIN, Dec. 2 (UPI) -- Just as the Airbus A400M military transporter is nearing its first flight, financial strains and political disagreements are threatening to bury the troubled project.

Military officials in Europe last week surely were relieved: Plane maker Airbus last week announced that its long-awaited A400M military transport plane will make its first test flight as early as next week. This is long overdue: The company had initially planned to get the bird in the air by early 2008, with the first planes to be delivered this year. Massive technical and management problems have delayed the project by three to four years, and some critics say the A400M might never be built in big numbers.

Focus Online reported Tuesday that Airbus parent company European Aeronautic Defense and Space Co. might drop the project because of out-of-control financials.

In May 2003 EADS signed a contract with seven NATO countries to build 180 of the planes for $30 billion, but PriceWaterhouseCoopers concluded that the overall costs for EADS will amount to $38 billion, the news site said.

France, Britain, Germany and Spain, the main backers of the program with 162 orders among them, have not yet decided whether they will allow for a major renegotiation of the contract. In the past weeks, talks between order nations have not resulted in a joint position on the plane.

It's not that these countries don't need the plane.

Britain is eager to modernize its current fleet of Hercules and Boeing C-17 carriers, worn by the mission in Afghanistan; France and Germany want new transport planes to replace their four-decade-old C-160 Transall machines, which are slow and inflexible.

However, Germany is known to be very worried about ballooning costs, and Britain has in the past publicly threatened to cancel its order. The project received a major blow when South Africa earlier this year unexpectedly canceled its order for eight A400Ms.

To keep the project alive, EADS wants order nations to pay a share of the increasing costs, but it remains unsure how nations will decide. If only one customer decides to cancel, the project is doomed.

EADS would have to pay back government subsidies worth at least $8 billion. EADS invests $100 million per month in the project, to which 6,000 jobs are linked, the company has said.

One of the most ambitious European military aircraft projects ever, the A400M is intended to replace the aging airlifting capacity of Europe's military powers. The turbo-prop carrier would be slightly larger than Lockheed Martin's C130J Hercules and able to transport troops and large equipment into combat zones.