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France : Airbus signs a statement of intent with the client nations launching the A400M.

Airbus SE has signed a declaration of intent (DoI) with the client nations launching the A400M (Germany, France, United Kingdom, Spain, Turkey, Belgium and Luxembourg) in which the framework for introducing this year an amendment to the contract that will be binding on all parties.

Airbus, the European defense agency OCCAR and the client nations have agreed to work on a series of contractual aspects, including an updated delivery plan and a road map to develop and complete the military capabilities of the A400M.

The DoI, completed today, represents an important step to reach a binding contractual agreement with OCCAR and the launching client nations in 2018 that mitigates the risks and ensures the future of the program. OCCAR manages the A400M program on behalf of the seven launching client nations.

This statement of intent offers a baseline on which to evaluate the A400M contract. An increase, which could be significant, of the provision for the deficit contract of the program in the results of the fiscal year 2017 is being valued. This decision will be made public on February 15, 2018. Having a clear road map, it would limit the residual exposure for the future.

"This agreement with our customers is an important step to continue mitigating the residual risks of the A400M program. I thank the nations for their support in this complex effort and I hope to continue counting on their continued commitment until the signing of the contract amendment, which will be beneficial for all, "said Tom Enders, Chief Executive Officer of Airbus. "Under these terms, Airbus will maintain its commitment to the A400M and to supply our customers' air forces with the best military transport aircraft in history. However, since its inception in 2003, the program has suffered a series of problems, which, combined with the effects of an inadequate contract and an insufficient budget, have caused significant losses for Airbus as the main contractor. We have a good opportunity to stop or, at least, In February 2017, Airbus urged launching client nations to initiate talks on the readjustment of contract content for the A400M, one of the largest and most significant European joint defense cooperation programs in history.

During the ministerial conference held on March 30, 2017 in Madrid, the launching client nations expressed their willingness to support this dialogue and to initiate talks to adapt the contract with Airbus.

Since then, Airbus and OCCAR have set up several working groups to evaluate the areas that required adjustments, such as the planning of deliveries, as well as the road map for the development of military capabilities, the results of which have resulted in the DoI reached today.

In view of the confidential conversations that are under way with the aim of reaching binding conditions, both parties have agreed not to comment further.

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Publication:Mena Report
Date:Feb 8, 2018
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