Airbus seeks to rebuild trust as A400M systems fall short

Thu Jul 30, 2015 6:17pm EDT
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By Tim Hepher

PARIS (Reuters) - Airbus Group has told buyer nations of the A400M transporter aircraft that it cannot deliver all of its high-tech defenses according to plan, casting a shadow over some of its military uses as Europe battles growing instability on its borders.

The troop and cargo lifter was developed at a cost of 20 billion euros ($22 billion) for seven European NATO nations and is already in service with French forces in Mali. Other core buyers include Belgium, Britain, Germany, Luxembourg, Spain and Turkey. Malaysia is so far the only export customer.

Some of the state-of-the-art systems designed to warn of threats such as missiles or hostile radar are more difficult than expected to develop, handing buyers a choice between taking planes or waiting for upgrades, European defense sources said.

But after years of political disputes and technical problems, a new military-aircraft management at Airbus Group (AIR.PA: Quote) is working flat out to rebuild trust worn down by delays and overruns that are typical of large defense projects.

An internal audit and regular updates appear to be paying off, people close to the talks said, with fewer visible signs of tensions that have led to costly stand-offs in the past.

A new setback came with the fatal crash of a plane being prepared for delivery to Turkey in May. Investigators are looking into a possible accidental data wipe.

Ankara is negotiating with other A400M buyers to see whether it could get a replacement aircraft by swapping deliveries as it steps up its military role in the region, defense sources said.

Although production is back to normal, a clampdown on some testing after the crash led to new development delays of up to three months, erasing the remaining "buffer," they said.   Continued...

People are silhouetted past a logo of the Airbus Group during the Airbus annual news conference in Colomiers, near Toulouse January 13, 2015.   REUTERS/Regis Duvignau