Monday, January 18, 2010

EADS calls A400M buyers' signals positive-report

* EADS chairman welcomes buyers' signals on costs
* Meeting set for end of week in Berlin

Defense News ~ FRANKFURT, Jan 17 (Reuters) - The chairman of Airbus parent EADS (EAD.PA) on Sunday welcomed signs by its partners in the Airbus A400M military plane project that they are ready to talk about additional costs which threaten the deal.
"That its a very positive sign," Louis Gallois said in an interview with Frankfurter Allgemeine Sonntagszeitung (FAS), confirming he had knowledge of a planned meeting.
"We are ready to work constructively towards a solution that is acceptable to all sides," he said.
The buyers of the 180 Airbus troop transporters, seven European governments, pledged this week to seek a joint deal with Airbus.
EADS had complained it was been left out of crucial meetings and had set a Jan. 31 deadline for an agreement to avoid scrapping the plane.
"The A400M even at a higher price is cheaper, more modern and more flexible than the (U.S.) American competition," Gallois said in the FAS story.
The Handelsblatt business daily in pre-release abstracts of a story due to be published on Monday said that the meeting between governments and Airbus was likely to take place at the end of the week in Berlin, citing government sources.
The paper added that the governments are ready to offer a compromise under which they would be willing to forego some of the handling characteristics sought by the military -- a step which could significantly reduce the plane's production costs.
There was no comment immediately available from the German Defence Ministry, which has been negotiating on the project.
The A400M's future has been threatened by an 11 billion euro ($15.87 billion) or 55 percent blow-out in development and production costs, overshadowing a successful maiden flight carried out last month.
The planes had been due for delivery in 2009 but the maiden flight only took place last month and delivery is now set for 2012.
Gallois said the planned development schedule had been too tight initially and no comparable plane had needed less than 12 years to come to fruition.
"...with about 10 years for the A400M, we will be ready in very good time," he said.
He said that 40,000 jobs depended on the plan, including 11,000 in Germany.
He also said a civilian plane, the long-haul A350, was planned to be delivered from 2013 onwards and while there were no delays at this stage, the schedule was ambitious.
(Reporting by Vera Eckert; Editing by Erica Billingham)

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