Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

Germany to seek penalties as Airbus A400M deliveries lag

Published 13/12/2016, 17:55
Updated 13/12/2016, 17:55
© Reuters. An Airbus A400M military aircraft participates in a flying display during the 51st Paris Air Show at Le Bourget airport near Paris

By Andrea Shalal

BERLIN (Reuters) - A sixth new Airbus (PA:AIR) A400M military transporter plane is due to land in Germany on Wednesday, with another likely to follow before the year's end, but Airbus faces penalties for the late deliveries, the German defence ministry said on Tuesday.

The European multinational A400M programme is years behind schedule, with Germany's share of the costs having risen to 9.6 billion euros (8 billion pounds) from an initial estimate of 8.1 billion euros, according to a ministry report to parliament.

Each plane is now estimated to cost 181 million euros, up from an initial 153 million, the report said.

In August the ministry asked Airbus for 12.7 million euros in damages for delays in delivering another A400M aircraft it received in July, and a ministry spokesman said it would seek damages for delays in subsequent deliveries as well.

According to the original delivery plan, Germany should have received 11 A400Ms in 2016, and should have a total of 17 planes altogether. Instead, it will have seven at year's end.

In addition, the ministry plans to withhold an unspecified amount due in payment to Airbus given certain "shortfalls" in the radar and defensive capabilities of the first tactical A400 airlifter, a defence ministry spokesman said on Tuesday, without providing details.

Those funds would be paid to Airbus once the capabilities on the aircraft reached required levels, he said.

The first tactical aircraft, which Germany formally accepted in Seville, Spain on Monday, is due to arrive at an air base in northern Germany late on Wednesday, with a seventh A400M likely to arrive on Friday, a spokesman for the German air force said.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Airbus spokesman Kieran Daly declined to comment on any penalties or shortfalls and said the company remained in "lengthy and complex" discussions about its contracts with participating countries.

Meanwhile, experts from the German and French defence ministries are still working on plans to jointly operate a fleet of smaller Lockheed Martin Corp (N:LMT) C-130J Super Hercules transport planes, a ministry spokesman said. He gave no timetable for completion of the work.

German Defence Minister Ursula von der Leyen announced plans in October to acquire four to six C-130Js and operate them jointly with France as a complement to the expected fleet of 40 A400M aircraft.

Germany has modified its military procurement process in the wake of the A400M problems and now insists on companies assuming more responsibility for delays and technical issues.

However that approach has led to delays in two key multi-billion-dollar projects - the MKS 180 multi-role warships programme and a new missile defence system to be developed and built by Lockheed and the multinational European missiles joint venture company MBDA, owned by Airbus, Britain's BAE Systems Plc (L:BAES) and Italy's Leonardo Finmeccanica SpA (MI:LDOF)).

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.