A400M: the time of anathemas has given way to calculators

(BRUSSELS2) A new meeting is taking place today (Tuesday 26 January) in Berlin. One of the last, hopefully, around the future of the Airbus A400M. The question is simple: how to distribute the "painful" of the Airbus A400M program, the additional costs incurred by the planned delay (2014 at the earliest according to the British (1)? If a few weeks ago, the words "soft" were flying high in the press. Today it is rather silence and discretion that reign. And it is rather the calculators that are out...

A rhythm of tension

A few weeks ago, indeed, the biceps were out. A director of Airbus confides to the press the possibility of an abandonment of the A400M program by the manufacturer. And a high-ranking German official from the Ministry of Defense - on condition of anonymity, well replies - replies in substance: "not a penny more for the Airbus". And hop, like a match on a canvas of gasoline, the comments ignite and the abandonment of the A400M program seems almost certain.

But we must be right. On the one hand, the positions expressed out loud were not really new. Already six months ago, some German officials were expressing what was then inscribed, black on white, in the program of the ruling CDU-Liberal coalition: a contract is a contract, the Germans remain great followers of the "Pacta sunt survenda". At the same time, everyone was well aware that abandoning the Airbus A400M program where it is currently - that is to say 3/4 completed - was a "little" absurdity (to put it mildly), for various reasons: operational aspects of this type of aircraft in the future, industrial and employment advantages. It should also be noted that the British government remained rather discreet in this verbal exchange.

How to reduce the slate?

The question: everyone knows the ins and outs. The program has fallen behind schedule. Or rather, its designers, too optimistic, counted on delivery times that were too short. And slippage is paid for; a skid, it should be specified, regular in the industrial contracts of defense. The program should undergo a total increase of 11 billion euros. And it is a question of determining who is going to pay? (2) The States must thus distribute among themselves a slate of 5,4 billion at the very least. The solutions are multiple: we can distribute this sum in due proportion (in proportion to the aircraft ordered), reduce the number of orders for the same overall price, or have a mixed solution of the two. We can also reduce the additional equipment on these planes.

The French seem to have agreed to pay a little more than their share. And the Spaniards too. During their last meeting Morin and Chacon expressed - according to the official press release - the willingness of their governments to cover part of the increased program costs “while reiterating that” EADS to be the first to bear the additional costs of the program ». The British are discreet; they would have already made a provision of £653 million (approximately 720 million euros) to compensate for a possible increase in costs and would be ready to accept a small reduction in the number of planes ordered. It is therefore essentially the German question that blocks: not wanting - for the moment neither a reduction in the number of devices, nor an increase in their share. A study carried out by PriceCoperWaterhouse determines that EADS, including our German colleague handesblatt echoes, mentions that EADS could take around 7,6 billion euros at its expense, which would reduce the burden on the States by 1 to 2 billion.

But the question is more complex than a simple accounting equation (who pays how much), there is also a more political question: shareholder balance. Payment of the invoice would, in fact, involve a capital increase. But if the French (via a state consortium, Sogeade, with Lagardère) and the Germans (via Daimler Dasa) (3) did not contribute in an equivalent way, the Franco-German parity would be broken...

It therefore seems certain that in the absence of an agreement, the agreement will have to be at the highest level between Nicolas Sarkozy & Angela Merkel. As so often in the event of Franco-German "friction".

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(1) The first delivery of the Airbus A400M could not take place before 2014, explained the Minister for Military Equipment, Davies, to the British MPs who questioned him on the question.

(2) Care should be taken with simple divisions of the total program cost by the number of aircraft. To have the real cost per aircraft, it is necessary to separate the development and research costs from the manufacturing costs of the "marketed" aircraft. It is then necessary to bring the sum back to the same time T (indexation of the price of the plane according to inflation).

(3) Which is no longer quite the case, Sogeade having 25% and Daimler-Dasa 22,5% See on the EADS website, the general description of the Company and its share capital to download
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