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Louis Gallois (EADS) confirms a 3-5 year delay for the A400M

(BRUSSELS2) Louis Gallois, CEO of EADS, came to Brussels today (March 24) to explain to deputies of the Assembly of the Western European Union (WEU) the position of his company in the delays of the 'A400M. Very interesting because it confirms certain postulates and puts forward more precise figures, in terms of delays, economic losses and the ongoing renegotiation of the contract with the States.

The cause of the delay, having accepted an unfeasible schedule, with an unsuitable organization and contract.

It is simple for Louis Gallois: “ EADS underestimated the capacity and complexity of the program. We accepted delivery of the aircraft in six and a half years. While we do not know of a program of this type delivered in less than 12 years. To meet the request of two of our French and British customers, who had transport difficulties, we accepted an overly ambitious timetable.Discussions are still ongoing with OCCAR. " If we delivered the aircraft over a period of 10 years, we would still be the benchmark in this field.» Or if I calculate correctly, a delay of at least 3-4 years or even a little more.

To this was added, specifies Louis Gallois, a "overly complex organization» at EADS, with a sharing of functions between Airbus and the military operators. “We have reorganized the program under the exclusive supervision of Airbus, by creating the “Airbus military” business unit. This organization is now effective. »

Finally, " our company has underestimated the ambitions and the stakes. We signed a commercial contract, which is not necessarily suitable for this type of aircraft, assuming the risk, no risk assessment program, no prototype, starting from scratch. " “This was a major mistake by our company.” recognizes Louis Gallois. " Now we have to review the contract so as to return to reality: the schedule, the necessary standards ».

The consequences: more than 2 billion euros in losses, not counting penalties

«The program is expensive for EADS". And Louis Gallois asserts that "the planned loss is more than 2 billion euros while the first flight did not take place". The penalties that EADS could have to pay amount, according to him, to “ 1,4 billion euros. But so far we haven't paid anything. We will pay this penalty when the planes are delivered. They are already provisioned in our accounts”. Note that only part of the penalties are provisioned in the 2 billion euros.

Termination of the contract or reduction of orders is possible but not without economic consequences…

« Effectively on March 31, if the first flight does not take place – and it will not take place – by consensus, the nations can put an end to the contract. And then we have 60 days to return the 5,7 billion received under the funds received for the pre-delivery of the aircraft. Welsh confirmed. But to clarify: unanimous agreement is required. We are not in the situation. »  But, with a blurted sentence, Louis Gallois clearly warned his interlocutors: “TAny reduction in orders will not be without effect. First of all, the price cannot be the same. And then it is not without industrial consequences ". In other words, economic… Around 40 jobs would depend on this program at Airbus and its subcontractors, according to an EADS manager, including a third in France.

And to also specify – in case of doubt that military development is necessary for the balance of Airbus: “ Opening up to the military market makes it possible to balance, through more regular activity, more cyclical civilian activity”.

To deal with the transport gap, transitional solutions exist and EADS is ready to study them.

As some states have evoked a reduction of the target, of the quantity ordered – confirmed Louis Gallois –, to release funding to reduce the capability gap and perhaps purchase American aircraft to deal with this lack of capability, who are " EADS is ready to look at this question he clarified. "We are aware of the delay,” he added. "We are going to offer our customers, particularly French and British, transition solutions to deal with the transitional gap: light cargo aircraft, transport A330s (for long distance), and the extension of current capacities through maintenance work..” From there to paying for this solution, there is a step that the president of EADS refused to take. When I asked him (between the elevator and his car) to find out if he was going to pay his customers for a C130 plane rental, he had a smile. “ I never said that. It was you who said it ".

First flight before the end of the year.

« The first flight, I hope at the end of the year. But this will depend on the feasibility of Fadec” (the engine control software system).

Un technologically remarkable aircraft...

Louis Gallois was keen to defend the technology chosen for the A400M. “The A400M is a unique aircraft, it will still be in service in 2050, so it must be at the technological level to live for 30-40 years.» It combines in a single volume the functions of a strategic and tactical aircraft. “It can carry 37 tonnes on a strategic mission. It has functions similar to those of a modern fighter aircraft and is more complex than the two most recent European fighters (Eurofighter and Rafale). It will have civil certification, which is a first for a military aircraft. This represents a huge technical constraint. But it is also a security for this aircraft, because it protects it from regulations in the years to come which may lead to the banning of military aircraft in civil air corridors." he added. Finally, the cost performance ratio is remarkable, it is little known.

… which has no competitors and has a “real” commercial future

No such device is available on the market. Even on the other side of the Atlantic. “ The Americans are not developing a competing plane “says Louis Gallois. On the contrary. " They follow our program closely and ask us to keep them closely informed. They tell us that this aircraft interests them. Because it fills a gap between the C27 or the C130 (smaller) and the C17 or the C5 (bigger) ». Once the difficulties are resolved, and the first deliveries are made, the A400M will be able to attack the export market. And he is " important ". Because it ultimately involves replacing the approximately 3000 C130s currently in service.


Nicolas Gros Verheyde

Chief editor of the B2 site. Graduated in European law from the University of Paris I Pantheon Sorbonne and listener to the 65th session of the IHEDN (Institut des Hautes Etudes de la Défense Nationale. Journalist since 1989, founded B2 - Bruxelles2 in 2008. EU/NATO correspondent in Brussels for Sud-Ouest (previously West-France and France-Soir).