EU nations assured financing to bolster military transport strength on Friday by reaching a deal to cover cost overruns for the 3-year delay in the A400M heavy lift plane program.
Defense contractor EADS said customer nations reached a deal in principle to pay an additional €3.5 billion in an agreement that waives delay penalties and lets nations participate in export sale profits. Nations include Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey.
Representatives from the nations and EADS met in Berlin today to finalize the deal. A new contract will be signed at a later date.
The company said it thanked the nations for giving decisive support to the program. The price of the contract will rise by €2 billion. Nations will also pay €1.5 billion to participate in export sales.
EADS considers that this agreement provides a sound basis for a successful evolution of the A400M program, the company said today.
EADS will strive to identify opportunities to significantly reduce risks in the A400M program and to deliver a state-of-the-art product within the new frame of the contract.
The medium-sized transport aircraft program, which was initially set to cost up to €20 billion euros, began in 2003 with commitments from various EU nations, was initiated due to a shortfall in transport needs for military and humanitarian needs. About 180 planes were expected as part of the deal.
Equipment shortfalls for heavy-lift aircraft, and helicopters was a challenge for both the European Union and NATO, said U.K. Secretary of State for Defence Bob Ainsworth in January.