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A400M DELAYED AGAIN – REVSIED DELIVERY SCHEDULE

A400M DELAYED AGAIN – REVSIED DELIVERY SCHEDULE

17 Oct 07. EADS has informed its A400M customers, including OCCAR, of its revised estimate for the first aircraft deliveries schedule. This will affect A400M deliveries to both European and other customer nations. A400M deliveries are now expected to start six months later than initially planned with a risk of a further slippage of up to a half year. A source close to BATTLESPACE suggests that this delay could cost EADS as much as €1bn at a time when the balance sheet is weak and investigations continue. The launch customer, the French Air Force, is expected to make an announcement this week. A number of key A400M customers, the Germans in particular are in a worrying position that their existing fleets are becoming ‘clapped out’ due to extreme work and wear and tear and the next avenue could be upgrades and improvements to these existing fleets which would negate the need for urgent A400M deliveries and thus delay full deployment of the aircraft.

The re-scheduling of the programme is driven by the slow progress in engine development, which stands on the critical path to achieving first flight, schedule overruns in the systems development, and a flight test programme that differs significantly from that of commercial Airbus aircraft.

Mitigation measures are being implemented, and the financial consequences are currently being assessed. They will be communicated with the 9-months earnings disclosure.

The first A400M is in production in the new final assembly line in Seville, Spain and is due to make its first flight in summer 2008. Sections of subsequent aircraft, which will join the flight test aircraft fleet, are in production. To date, the first nine contractual milestones have been completed including the inauguration of the Aircraft Test Facility. The A400M Systems Simulator, designated “Aircraft Zero”, was presented to the customers by means of a fully functional demonstration at the end of July 2007. This simulator is an essential part of the aircraft certification process.

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