Spain has moved to halve its planned fleet of Airbus A400M military transport planes by offering the rest for export, casting a fresh shadow over Europe's largest defence project as the long-awaited plane goes into service. The move is the latest sign of pressure on crisis-hit European nations that bought the delayed troop carrier, which itself had to be rescued in 2010 because of a cost blowout blamed on technical, management and political errors.
After a four-year delivery delay, the first A400M flew to its new operating base in Orleans, south of Paris, on Friday. The aircraft was designed to meet a looming shortfall in military transport capacity among seven European Nato nations: Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey. But the 20 billion euro ($26 billion) project went more than 5 billion over budget, forcing buyers to agree a price hike and a cash injection to be repaid from future export royalties.
After reviewing its needs, Spain has reduced its requirement to 14 aircraft instead of 27, a defence official told Reuters. It has told Airbus Military that the 13 remaining A400M aircraft it has ordered would be available for export. European buyers have ordered a total of 170 A400Ms, reduced from 180.
Although the 2010 rescue package prevents buyers from cancelling further orders outright, the largest customer, Germany, is expected to release 13 of its 53 aircraft for export as a condition of parliamentary approval for the purchase. Others including France are studying whether they can do the same, defence sources said. But doing so raises thorny issues over export royalties and would require all partners to agree.
Airbus Military is seen as keen to avoid a premature stampede towards export markets as it seeks to keep factories running to support exports after securing domestic production. So far Malaysia is the only foreign buyer with 4 on order. After writing off a total of 4.2 billion euros for its share of losses on the domestic part of the programme, Airbus aims to kickstart a fresh export campaign now that the A400M is in use.