25 Feb 2010

Agreement reached on extra costs of A400M

5:56 pm on 25 February 2010

European governments have reached an agreement on sharing extra costs for the A400M military transport plane, which is over budget.

Spanish Defence Minister Carme Chacon said that the seven countries involved and the planemaker EADS, owner of Airbus, had reached an agreement.

He said further technical details would be agreed on Thursday.

The BBC reports the A400M is 5 billion euros ($US7.25 billion) over its initial budget as a result of weight and engine problems.

The announcement came at a meeting of European Union defence ministers in Majorca.

Airbus chief executive Tom Enders earlier told the BBC the company would consider ending the programme if European governments failed to provide more money.

Seven countries - Britain, Belgium, France, Germany, Luxembourg, Spain and Turkey - have ordered 180 A400M aircraft between them.

Under contracts signed before the start of the programme six years ago, Airbus agreed to sell them the planes for a fixed price.

The A400M, which is designed to fly troops and equipment, is supposed to replace ageing military cargo carriers in several European air forces.

It was due to go into service last year, but will not now do so until 2012 at the earliest.

The BBC reports the delay led to South Africa cancelling an order for eight planes.