BEGINNINGS

In the 1980s, the different national armies began considering replacements for their tactical aircraft, since the C-160 Transalls, used by the French and German armies, would have to be taken out of action in the 2010s, followed by the Lockheed C-130 Hercules, used in all the national fleets. Although France and the United Kingdom quickly expressed a preference for a European solution, paradoxically Germany dragged its feet. It had a preference for another solution, the Russian-Ukrainian Antonov 70, for both budgetary and political reasons. In May 2000, then-Defence Minister Rudolf Scharping confirmed the choice of the A400M, justifying it by the need to give “absolute priority to a common European solution”. Germany was won over in the end by the Blair government’s choice of the Airbus rather than an American solution – over which the US ambassador to London voiced “deep disappointment” – along with the necessity of reaffirming good relations with France.

1997 SOP

In December 1997, the final version of the statement of principles (SOP) was adopted. It established a single-phase contract, ie not making a distinction between the development and marketing phases (contrary to general practice for military contracts), since the states had had certain bad experiences they did not wish to repeat (Eurofighter, Asute and Nimrod AEW). The contract was awarded to a single manufacturer and the price was identical for all the partner states. Once the contract was signed, no state could pull out without paying dissuasive penalties, to keep from jeopardising the budget.

The first SOP mentions 291 aircraft, but that number dropped down to 180, with the last contract signed in 2003, the minimum number initially estimated by Airbus for the start-up of production. There were several reasons for the reduction, the first being that certain states (Germany, the United Kingdom, Spain and Turkey) lowered their ambitions, followed by the withdrawal of two states (Italy and Portugal) for political and budgetary reasons.

2001 CONTRACT

The defence ministers of the European states participating in the project signed a memorandum of understanding, at the Aviation Exhibition in Bourget (near Paris), on 19 June 2001, for the purchase of 196 aircraft.

The final contract with the builder, Airbus Military Company, an EADS subsidiary, was set to be signed on 16 November 2001, at OCCAR (Organisation for Joint Armament Cooperation), which was transformed into an embryonic European armaments agency on that date and placed in charge of the A400M programme. The German government postponed the signature for internal reasons, however.

In the end, the defence ministers of the eight participating countries signed the contract, on 18 December 2001. In an addendum to the contract, however, Germany agreed to confirm its order by 31 January 2002, after obtaining the Bundestag’s approval.

ITALY PULLS OUT

In June 2001, Silvio Berlusconi’s re-election in Italy steered the country on a new course, less receptive to European projects. The new government rejected the European arrest warrant, the food agency in Finland and the Airbus A400M. The new Defence Minister, Antonio Martino (the number two of Forza Italia), explained, in October 2001, his country’s refusal to take part in the project: “This aircraft does not serve military aviation.” Prime Minister Berlusconi denied that a decision had been taken, but a few weeks later, on 20 December, he confirmed his opposition to the A400M. “This is a project that only interests the French industry and those who will produce the aircraft,” he explained. Italy had initially planned to order 16 aircraft.

GERMANY HESITATES

The German government had a hard time obtaining the Bundestag’s agreement for the financing of its order of 73 aircraft. The opposition parties (Christian Democrats in CDU-CSU, FDP liberals and PDS communists) opposed the programme. Even the Greens – who belonged to Chancellor Schröder’s coalition – had misgivings.

On 12 December 2001, the government finally came to agreement with the Bundestag’s Finance Committee on the financial package: €5.11 billion were to be allocated in the 2003 budget (on top of the €5.5 billion in the 2002 budget). However, the opposition in parliament (CDU-CSU, FDP) initiated proceedings before the Constitutional Court. In late January 2002, the court ruled that the government’s financing arrangements were in breach of the parliamentary sovereignty of the assembly that would be elected the following autumn. The Bundestag ended up approving, on 22 March 2002, the first instalment of the aircraft ordered by the Bundeswehr. The second has been postponed until after the elections.

In early December 2002, Defence Minister Peter Struck officially confirmed that Berlin was reducing its order to 60 aircraft as a result of the economic crisis. The cuts are “responsible militarily,” because the key to the future lies not in the quantity ordered but in “cooperation with the European and American partners,” he explained.

PORTUGAL BACKS OUT

Portugal (three aircraft) exited the programme in May 2002. Portuguese Defence Minister Paulo Portas, representing the new centre-right (PSD-CSD) government led by José Manuel Barroso, said the decision was based on financial reasons. The withdrawal was confirmed by the military programming law in February 2003. The Airbus A400M is “so expensive” that it would be preferable to buy the C130J, explained a Defence Ministry spokesman. “The American competitors made an offer that lets us buy twice as many aircraft.” The reasons are in fact more political, however. The decision came in the midst of the controversy over the war in Iraq, with Portugal deliberately siding with the Americans and France and Germany opposing the intervention. For Defence Minister Portas, a declared Atlanticist, this gesture was a way of expressing loyalty to the US government.

EXPORTS

A first step towards exports of the A400M was taken with the signature of a statement of intent to purchase with South Africa, on 9 December 2004, confirmed in March 2005 for eight aircraft. The country is participating in the programme in the amount of €750 million.

A statement of intent was signed with Chile in July 2005 for delivery between 2018 and 2022. There has been no follow-up action since then.

A contract was signed, on 8 December 2005, with Malaysia for the purchase of four aircraft. This agreement seals the Malaysian industry’s participation in the programme in the amount of around €200 million. Malaysian subcontractors are designing and manufacturing certain parts of the Airbus fuselage.

In January 2008, Airbus failed to win a contract with Canada. The Canadian government approved the purchase of 17 C-130Js from the American manufacturer Lockheed at a cost of CAD$4.9 billion.

DELIVERY CALENDAR

The contract establishes a staggered delivery calendar.

• France: October 2009 to May 2019

• United Kingdom: March 2010 to April 2015

• Germany: from November 2010

• Spain: November 2011 to May 2021

• Turkey: December 2009 to February 2014

• Belgium: October 2018 to May 2020

• Luxembourg: October 2017

• South Africa: 2010 to 2012

•Malaysia: no data

Further information is available at www.europolitics.info > Search = 246528

The Airbus company

• On 25 January 1999, Airbus set up Airbus Military Company (AMC) under French law to respond to the request for proposal from the member states. Following Italy’s exit, AMC was transformed into Airbus Military SAS – a company governed by French law – and signed the first contract with OCCAR (December 2001). It then evolved into Airbus Military Sociedad Limitada (AMSL) – a company governed by Spanish law – and signed the final contract in May 2003.

Shareholders: Airbus (69.44%), EADS Casa (20.56%), the Belgian firm Flabel (4.44%) and Turkish Aerospace Industries TAI (5.56%).

NB: Flabel is owned by several Belgian industrial firms: 25% Sonaca, 25% Asco, 25% Barco, 17% Sabca and 8% Sabca Limburg.

• EADS was incorporated, in December 1998, under the laws of the Netherlands. In July 2000, it absorbed Aerospatiale Matra (AMC, France), Daimler Aerospace (DASA AG, Germany) and Construcciones Aeronauticas (CASA, Spain).

Shareholders: German firm DASA (22.5%), French firm Sogeade (25%) - 60% owned by the French state through Sogepa and Lagardère (Desirade) -, and Spain’s Sepi (5.49%) – a state-owned holding company – established a shareholders’ pact (52.99%), while the remainder of the capital was floated on the stock exchange (47.01%). Around 0.52% is held by employees.

• The engine: A consortium of engine manufacturers, Europrop International (EPI), comprising Snecma (Safran group), Rolls-Royce (UK-Germany), MTU (Germany) and ITP (Spain).

• Avionics: Thales (France) for the flight management system, Sagem (Safran group, France) for the GADIRS (location system using GPS and inertia), RDE (Germany) for the load master control system and EADS-DE (Germany) for the DASS (defensive aids sub-system) and the M-MMS (military mission management system).

The main subcontractors to Airbus

• The engine: A consortium of engine manufacturers, Europrop International (EPI), comprising Snecma (Safran group), Rolls-Royce (UK-Germany), MTU (Germany) and ITP (Spain).

• Avionics: Thales (France) for the flight management system, Sagem (Safran group, France) for the GADIRS (location system using GPS and inertia), RDE (Germany) for the load master control system and EADS-DE (Germany) for the DASS (defensive aids sub-system) and the M-MMS (military mission management system).