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German defence minister welcomes deal to save military transporter

Other News Materials 6 March 2010 13:30 (UTC +04:00)
German Defence Minister Karl-Theodor zu Guttenberg welcomed Saturday the deal to save the A400M military transport plane, which has been hit by spiralling costs.
German defence minister welcomes deal to save military transporter

German Defence Minister Karl-Theodor zu Guttenberg welcomed Saturday the deal to save the A400M military transport plane, which has been hit by spiralling costs, DPA reported.

Seven governments and the EADS/Airbus aerospace company agreed Friday to jointly pick up the tab for cost overruns that have dogged development of the four-engined airlifter.

Guttenberg said the deal, reached after months of haggling, would secure jobs in German's aerospace industry.

It also made sense from a military point of view because it would replace ageing Transall aircraft that were currently in use by Europe's air forces, he said.

Germany has ordered 60 of the turbo-prop A400Ms and is due to take delivery of the first batch in 2014.

EADS had threatened to terminate the project unless governments stumped up more cash to offset the cost overruns.

The company said Friday the seven buyers agreed to top up the purchase price by 3.5 billion euros (4.7 billion dollars), comprising 2 billion euros in cash and 1.5 billion euros in export credits.

The agreement will still require approval from governments and legislatures. EADS said the export credits might one day even bring the governments a profit if the plane becomes a commercial success.

Airbus committed itself in 2003 to supply 180 of the planes to the buyer nations for a final, fixed price of 20 billion euros, but later began demanding more.

In addition to Germany, the buyer consortium comprises France, Spain, Belgium, Luxembourg, Britain and Turkey.

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