February 25, 2013
Credit: Jens Flottau/AWST
After huge delays and cost overruns, the Airbus A400M is finally nearing first delivery to the French air force, a milestone that will also mark the beginning of a series of upgrades spanning five years.
Airbus Military “firmly committed” to handing over the first A400M before the Paris air show, toward the end of May or early June. “With the level of readiness technically and industrially, we can do it,” program chief Cedric Gautier says. Airbus Military expects to obtain European Aviation Safety Agency (EASA) certification for the aircraft in the next few days, saying, “all documents have been released; certification is imminent.”
France will still receive its initial aircraft more than three years later than originally planned but with a series of capability upgrades slated for later. The first aircraft will only have initial operating clearance, essentially allowing its use as a freighter with no significant additional military functionality.
Airbus Military has also signed an initial in-service support contract spanning the first 18 months of operations for the French aircraft with Occar, the intergovernmental organization that negotiates A400M contracts on behalf of France, Germany, the U.K., Turkey, Spain, Belgium and Luxembourg.
With the program entering a new phase, spare parts and maintenance support are becoming more urgent issues to resolve, but senior industry officials say it is already apparent that negotiations will be tough. The A400M was originally based on a commercial business model that placed all the program risk with the manufacturer. Given the program's high number of change requests and subsequent delays, that was later altered somewhat in protracted and highly controversial talks.
Particularly on the engine side, program returns are mostly achieved through profit margins in the aftermarket business. Senior industry officials say A400M customers consider maintenance and spare-parts prices too high, but the industry side is reluctant to give up too much margin.
The cost overruns mean the program will not make a profit with only its 174 firm orders, so there is a strong incentive to earn as much as possible from parts and repairs. Initial rounds of talks on this point were held early in the development phase, but few concrete agreements have been reached. Other countries are likely to make adaptations to the French approach, one executive says.