UK reduces order size of A400M military freighters to adjust costs
30 Mar 2010
The United Kingdom has cut the size of its original order for Airbus 400M military transport planes in bid to adjust costs. It will now take in three less aircraft than the original 25, adjusting the numbers against an increase in programme costs, the country's defence secretary said.
The Royal Air Force will now take delivery of 22 planes, instead of the 25 as originally conceived, defence secretary Bob Ainsworth said in a written statement to the Parliament.
The UK has made its move just after it, along with the seven partner nations that originally placed the orders in 2003, agreed to amend the original contract and plough in additional funds into the programme.
''The UK contribution to this further investment will be achieved by reducing the number of aircraft to be delivered to the RAF so that we remain within our existing cost envelope,'' Ainsworth said. That involves ''a maximum reduction of three aircraft,'' he added.
The A400M programme was running four years behind schedule and faced huge cost overruns, primarily on account of the development a state-of-the art engine, and was threatened with closure by EADS, Airbus's parent firm, if the original contract was not amended and additional funds not released. EADS claimed the original fixed price contract was no longer tenable and was bleeding the firm putting at risk its profitable commercial aircraft operations.
The seven partner nations ordered 180 of the military transports in 2003.
