EADS has drawn up a shopping list of A400M contract renegotiation demands - it includes a revised delivery schedule, new delivery standards, slowed production ramp-up, lower penalties and generous allowances for inflation.
Or, the programme could be axed if OCCAR, the procurement agency representing European customer nations, decides to exercise its right, from 1 April, to get out. Swinging that sword of Damocles would force EADS to give back €5.7 billion ($7.27 billion) of advance payments.
It's a threat that EADS should be taking seriously. However much EADS may now argue that the contract is unworkable, OCCAR can opt to put its clients first and look seriously at filling their urgent operational needs with proven US aircraft that are flying today.
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But this being Europe, politics will probably save the programme. Termination, or even just cancellation of some individual aircraft, would destabilise intra-European relations at a time when economic crisis demands unity and jeopardises a huge number of jobs. Meanwhile, recent experience of UK forces in Afghanistan and Iraq has highlighted the need for a transport aircraft of the A400M's size and tactical capabilities.
EADS statements on the A400M look at best aspirational. "Revised industrial plans to complete the A400M programme could lead to a significant charge," it warns. It's an early contender for understatement of the year.
Source: Flight International
