A400M Programme MOU signed

Eight European Defence Ministers gathered together today at Le Bourget, as they did last year at Farnborough, to wish the stuttering A400M military air transport aircraft on its way, by signing a Memorandum of Understanding.

The Defence ministers of Belgium, Luxembourg, France, United Kingdom, Spain, Germany, and Turkey, with Portugal having not yet finished its internal approval process, have confirmed their commitment to participate as full member in the programme. It will have finished its approval process in the near future. However, Germany's signature is subject to final approval by the parliament.

In a statement the ministers confirmed "...their strong commitment to strengthen the capabilities of their Air Forces for strategic and operational air transportation. The A400M programme is tailored to this end and contributes to the participants' commitment in support of the European Headline Goal, and also refers to NATO's Defence Capability Initiative. It generates the necessary potential for harmonising operational and support arrangements and offers a large margin for cost savings by means of co-operation. It also paves the way for greater task sharing in meeting European military air transport demands."

'Best practice' methods widely used in the civil aircraft business will be applied to the management of this programme; in particular, the contract with industry will cover the full scope of development and production. Airbus Military Company (AMC) has proposed to fund a significant share of the costs of the programme.

The programme will be managed for the participants by the Organisation for Joint Armament Co-operation, known by its French acronym OCCAR (Organisation Conjointe de Cooporation en Matiere D'ARmement), which gained its own legal identity on 28 January 2001.

After the signature of this MoU by all participants, the total commitment will reach at least 196 aircraft in a single launch order (plus 16 aircraft for Italy, to be confirmed).

The next step will be to sign the more detailed arrangements for the management of the programme within OCCAR and also the contract between industry and OCCAR; these are expected to be concluded by the end of September 2001 subject to satisfactory economic terms and conditions to be achieved in final contract negotiations.

The commitments made by the participants are for the procurement of the following numbers of aircraft: Belgium 8 (including one on behalf of Luxembourg), France 50, Germany 73, Portugal 3, Spain 27, Turkey 10, UK, 25, with Italy looking to fund 16 more.

EADS CEOs Philippe Camus and Rainer Hertrich hailed the agreement for European procurement of the A400M military aircraft as a major breakthrough in building an integrated European defence market.

"Never before have European nations jointly defined their procurement needs," Camus and Hertrich noted. "This type of joint European procurement is the most efficient, cost-effective way for European nations to modernise their armed forces. It also boosts the process of industrial integration in Europe, permitting us to compete on an equal basis with US industry."

Alberto Fernandez, Head of EADS Military Transport Aircraft Division said: "We will now continue with the negotiations of the industrial contract with OCCAR and the participating nations. We will also pursue the necessary industrial preparations in order to guarantee the fulfilment program. Our successful Airbus programme serves as a model both in technology and in managing the project."

However, the joy at getting the MOU signed may be short lived. There is evidence that the Germany Government, which has yet to confirm that it has funding in its budget for the 73 it is ordering, and which faces mounting political criticism at home, was forced into this signing by the French at a recent Franco-German summit.

During a question and answer after the signing the Ministers were reluctant to say outright that the programme would go ahead, referring to"satisfactory economic terms" and "conditions to be achieved in final contract negotiations"

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