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Europe

Europe approves funds to rescue Airbus military-transport plane

Text by News Wires

Latest update : 2010-03-07

European governments have agreed to cover the cost overruns of the troubled Airbus A400 military transport programme, ending months of difficult negotiations.

AFP- European governments agreed Friday to give aerospace giant EADS an additional 3.5 billion euros (4.76 billion dollars) to save the troubled Airbus A400M military transport project, the firm said.
   
"EADS thanks the nations for the decisive support they are bringing to the programme through this agreement," a statement said, after officials from seven NATO countries met in Berlin to hammer out a deal.
   
"EADS considers that this agreement provides a sound basis for a successful evolution of the A400M programme," the Airbus parent company added, vowing "to deliver a state-of-the-art product within the new frame of the contract."
   
Belgium, Britain, Luxembourg, France, Germany, Spain, Turkey ordered A400M planes but after the project ran into trouble they initially balked at EADS demands that they cover cost overruns of about 5.2 billion euros.
   
French Defence Minister Herve Morin confirmed that a deal had been reached.
   
The entire project, which was meant to show Europe's independence from US defence suppliers and employs 10,000 people, had been under threat, after years of delays lead several countries to question its viability.
   
But some governments, particularly France -- which is home to the main Airbus plant and is particularly attached to the idea of shared European defence prjects -- pushed hard for a solution.
   
According to EADS, the agreement reached Friday saw the original contract to buy the planes increased by two billion euros.
   
Meanwhile, the governments agreed to waive damages for the delays, accelerate pre-delivery payments and provide another 1.5 billion euros in exchange for a share in any future export sales.
  
 

Date created : 2010-03-05

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