Airbus wants more money for A400M

Stephen Beard Jan 12, 2010
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Airbus wants more money for A400M

Stephen Beard Jan 12, 2010
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TEXT OF INTERVIEW

Steve Chiotakis: The European aircraft maker Airbus says the future of its A400M military cargo plane is in doubt. If European governments fail to cough up more cash, Airbus says it’ll cancel production. That move would cost thousands of jobs. Let’s bring in Marketplace European Correspondent Stephen Beard, who joins us live from London this morning. Hi, Stephen.

Stephen Beard: Hello, Steve.

Chiotakis: So what’s the aircraft designed to do?

Beard: It’s a big military transporter, capable of carrying a lot of heavy military equipment and troops. It’ll land on a conventional runway or a dirt strip. It’s a lot bigger than the Lockheed Hercules, but smaller than Boeing’s really massive C-17. So I guess you’d say it’s a mid-sized transporter.

Chiotakis: And what’s the problem, Stephen? Is this a technical thing or a financial problem?

Beard: It’s both, really. I mean there have been technical problems, but the really big issue now is money. It’s costing a lot more than Airbus originally thought, and Airbus is asking the seven mostly European governments that agreed to buy this plane to stump up another $7 billion. Now these governments — most governments — are strapped for cash, so they’re saying no. So Airbus is threatening to cancel. David Leomount of GlobalFlight.com says Airbus is embarked on a game of poker with its customers.

David Leomount: Really what I think Airbus is trying to do is call their bluff, if you like. Because the world’s military, not just Europe’s, actually needs an air lifter of this size. There isn’t another choice like this out there.

However, if Airbus does cancel, it clearly could give quite a boost to Boeing and its C-17 transporter.

Chiotakis: All right. Marketplace European Correspondent, Stephen Beard, in London. Stephen, thanks.

Beard: OK, Steve.

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