Airbus loses further €1.3bn on A400M military transport plane

An A400M military transport plane © Airwolfhound
An A400M military transport plane © Airwolfhound

Airbus has announced further losses of €1.3bn in its A400M military transport plane project, despite reporting better than expected profits for 2017.

The A400M military transport plane offers a number of advanced technological capabilities, with Airbus claiming that it can carry strategic loads, deliver into tactical locations with small and unprepared airstrips, and act as a frontline tanker for other aircraft.

However, the development has suffered a number of serious setbacks over the past few years and losses on the troubled plane project now total more than €8bn. Notably, a crash during a test flight in Spain in 2015 led to the deaths of its four person crew, and Airbus has also struggled to find buyers for the project.

How did Airbus respond?

Airbus’ chief executive, Tom Enders, issued a statement downplaying the ten-figure loss, and attributing it to a realignment of expectations for the project which will reduce the potential for future risk in the project.

He said: “On A400M, we made progress on the industrial and capabilities front and agreed a re-baselining with government customers which will significantly reduce the remaining programme risks. This is reflected in a substantial one-off charge.”

The comments come only a week after Airbus reached a provisional agreement with seven European NATO members, who were contracted to buy A400M aircraft, over additional unexpected delays to delivery.

How has the loss affected Airbus’ finances?

Despite the significant losses on the A400M military transport plane, Airbus posted a better than expected operating profit of €4.25bn on revenues of €66.76bn. The company expects to deliver around 800 commercial aircraft in 2018, depending on manufacturers meeting their deadlines.

If it achieves this target, it says profits would increase a further 20% for 2018, which would represent something of a recovery for Airbus. The combination of setbacks to the A400M aircraft and difficulties in selling its A380 commercial jet has led to the company being in what Enders called “permanent crisis management for the last two or three years”.

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