Europe Signs A400M Bailout Deal

10 November 2010 (Last Updated November 10th, 2010 18:30)

European buyers of the A400M military transport plane have signed an agreement in Toulouse in France to rescue the €20bn programme to build the beleaguered transport aircraft. The agreement calls for a price increase per plane of €11m, for a total of just under €2bn, and

European buyers of the A400M military transport plane have signed an agreement in Toulouse in France to rescue the €20bn programme to build the beleaguered transport aircraft.

The agreement calls for a price increase per plane of €11m, for a total of just under €2bn, and an additional €1.5bn provided by credits against future exports.

Developed by EADS, the A400M programme has been delayed due to uncertainties over technical specifications and pressure on defence budgets.

Under the agreement, buyers will acquire a total of 170 planes, instead of 180 initially planned when the project was launched in 2003.

The UK has decided to reduce its order by three planes to 22, while Germany will take 53 planes instead of 60.

The A400M aircraft buyers include government’s of seven nations, the UK, France, Germany, Belgium, Luxembourg, Spain and Turkey.

French Defence Minister Herve Morin said the A400M was an emblematic programme that Europe could not abandon for fear of being dependent on the US in the 21st century.