07:54 GMT, March 10, 2009 http://www.defpro.com/news/details/6036/ | During today’s press conference, EADS managers said to defpro.com that a termination of the A400M military transport aircraft programme is very unlikely.
As defpro reported last month, the French Senate unveiled a report entitled “L’Airbus militaire A400M sur le ‘chemin critique’ de l’Europe de la défense” – “The A400M Military Airbus on the critical path for European defense”, in which it was said that the participating nations in a collective or individual decision have the legal right to abandon the programme and demand their funding payments be returned if the first flight is delayed by more than 14 months. This deadline is to expire 1 April 2009.
An EADS manager who declines to be identified however said to defpro.com that a termination of the programme may only be obtained with a “unanimous mandate” of all launch nations. This make a termination very unlikely, the manager said. However, there is a second possibly of cancellation aircraft by aircraft, the manager said.
Theoretically, a cancellation of the A400M contract by OCCAR would trigger reimbursement of the pre-delivery payments and other payments received from OCCAR. The total amount is approximately €5.7 billion. Separately, each of the launch nations may claim cancellation of those individual aircraft which would be substantially delayed.
During the press conference, Louis Gallois, CEO of EADS confirmed that flight tests with the A400M TP400-D6 engine, which is fitted to a modified C-130 aircraft, have been successful so far. Gallois said that three flights have been carried out with very positive results.
Gallois also confirmed that the problem is not the engine itself but rather its implementation into the aircraft. “The engine is working very well on the flight test bed.”
“The real challenge is the computer which controls the engine as well as the entire propulsion system” he said. “All now depends on the Full Authority Digital Engine Controls (FADEC) for the EPI TP400-D6 turboprop engines, this is the main reason we are late.”
Gallois also said that the date of the A400M first flight will be essential for the company, since it is committed to deliver the first aircraft exactly three years after this first flight. The time schedule of the first flight depends on the availability and clearance FADEC, he said.
The CEO pointed out those critical parts of the aircraft includes the Flight Management System (FMS), Military Mission Management System (MMMS) and some other systems which are all not on Airbus responsibility but rather other large suppliers including Sagem, Thales, and Rheinmetall.
Gallois also said that the company is negotiating with the customers nations on the time schedule of the production line as well as on the different stand-ups of the aircraft. “During these negotiations France and Germany have declared they remain committed to the programme,” Gallois said.
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Background information.
In January 2009, EADS announced it had proposed to the launch nations a new approach for the A400M aimed at finding a way forward for this programme. With this proposed new approach, the first delivery of the A400M would occur three years after its first flight. In line with complex military development programmes, EADS suggested to resume series production only once adequate maturity is reached as indicated by flight test results. EADS continues to address the industrial challenges of this programme and continues to elaborate their impacts on the A400M delivery schedule. EADS is still working with the suppliers of the propulsion system to determine a reliable date of engine availability and a first flight date for the A400M. On a wider level, EADS is working with subcontractors for the engines and mission critical systems to update its own delivery schedule.
In 2008, EADS EBIT was impacted by €-704 million related to the A400M programme. EADS will only be able to update all of the financial consequences of a revised industrial plan, once the availability of the engines and mission critical systems is firmly determined or once OCCAR’s position on the proposal made by EADS is known.
As already communicated with the 9-months 2008 results, the unavailability of a reliable schedule update on the A400M programme led EADS to apply the early stage method of accounting until certain events allow the resumption of the estimate at completion method.
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March 10, 2009 at 10:40 am