Yikes….A400M Woes Part III

KUALA LUMPUR: The story below from Defense News is self-explanatory. However it did not mentioned whether export customers like Malaysia and South Africa, would be involved, though it is likely that the French will consult with our government. Malaysian Defence sentiment on the matter is clear, cancel the deal but many have since said it will be very difficult due to the commercial arrangement with CTRM.

Of course, CTRM will be put on the spot, but again the Armed Forces needs which is more important clearly outranked what ever needs of the industry. Whether we want to cancel the procurement or not, it will be in the best interest for us to be involved in the negotiation process so we will get the best deal.

Anyways, since EADS/Airbus has other military products like the Eurocopter Cougar or the CN-235/295 series, I am sure we can have the cake and eat it too. However it will all depend on us getting on the ball, pronto.

Malaysian Defence believes this is a top priority for the new defence minister apart from the other important things of course.

A400M Customers To Have 3 Months To Renegotiate Contract

Paris – An announced standstill agreement on the A400M is expected to be signed next week, giving the European launch customers three months to renegotiate the contract with EADS for the military transport aircraft, French Defense Minister Hervé Morin said April 8.

Morin told the European American Press Club that his British counterpart had posed questions on the matter but that he persuaded him on the sidelines of the NATO summit last week. “He gave his agreement,” Morin said.

“We can sign the standstill agreement in the next few days,” he said. That would give the seven launch customers and EADS three months to renegotiate the terms of the 20 billion euro ($26.6 billion) development-and-production contract for the A400M.

The complexity of the aircraft, particularly the engines, and the demanding military specifications needed for an aircraft that requires civil certification mean the A400M would be four or five years late, Morin said.

That lateness means some countries would need to take “palliative measures” to fill the capacity gap, which meant probably buying aircraft – likely American – off the shelf, Morin said. The stopgap buys mean less money to acquire the full number of A400M planes, and the problem now is how to reduce the number of “target” buys, he said.

The standstill keeps the contract in place but gives time to reset the terms in light of British and French operational needs for interim airlift, and also allows EADS to renegotiate a deal that eases the burden of delivering full initial operating capacity on the A400M.

EADS so far has booked some 2.2 billion euros of charges and faces a repayment of 5.7 billion euros of advance predelivery payments if the program is canceled.

The customer governments opted for a commercial contract for the A400M because they thought Airbus, as a leading civil airliner maker, would bring the plane in on time and budget, avoiding the red tape of a classic military procurement.

Airbus also submitted to political pressure to pick a new European turboprop engine rather than opt for a rival motor from Pratt & Whitney Canada.

Separately, Morin confirmed that he expected a signing in the next few days of an order for a third projection-and-command ship, bringing work to STX France and DCNS.

-Malaysian Defence

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9 Comments

  1. I totally agree that we cancel it. CTRM needs to fend for it self like any other business. Lets just go for the C130 J at least 3-4 example and upgrade futher the 130-H version. Even that you will be looking at a budget minimum RM1.8 billion.

  2. I think cancelling the a400m buy and instead get the Il-76MF would be good. It has a large payload (60 tons of cargo) and can do air-to-air refuelling. Jordan purchased two in 2005, making that country the first foreign user of the variant. Commentaries in the Western aviation press suggested the Jordanians got a pretty good deal, pointing out that the Il-76MF had about three-quarters of the lift capacity of the modern Boeing C-17, range equal to the C-17, but about a quarter of the flyaway cost.

  3. Yup let’s go with Il-76/78 for sure. It may not be a ‘glitzy’ nor a ‘glamorous’ procurement but I sure does think it’s a practical solution rather than waiting for something in which its fate have not yet met its clear conclussion.

    IMO, we should buy the Ilyushins for strategic transport, Super Hercs for long range tactical trasport and CN-235 for short-range transport. The RMAF could optimised their usage through implementing the hub and spoke concept just like MAS or any other commercial airlines.

    They use B777 for long range destination, B737 to regional one and ATR72 to short range airport. This concept is more focus and cost effective in terms of operation, management and maintenance.

    Marhalim: I had the same suggestion some time back but it seems the Armed Forces are parochial about spending money on things that they do not owned, hence the current arrangement of sending Hercules on ad hoc basis to Lebanon and other places where Malaysian peacekeepers are stationed. We should use commercial asset to move things around especially for long distance missions during peace time and when there is no logistical problems.

  4. But what about operation and maintenance cost for IL-76. I know the plane is cheap but the maintenance and operation cost for russian made planes are rumored to be more than western made one….well i gues we have to balance it out anyway.

  5. All Russian and former Warsaw Pact aircraft have higher operating costs. Not only do their engines have a lower TBF, their airframes are also designed for less flying hours. During the cold war, this was not a problem because engines were simply discarded instead of overhauled. There existed a vast military industrial complex able to produce replacements cheaply. No longer. Thats why in the long run, operating Fulcrums and Flankers are more expensive. Russian air/ground ordnance also has a lower shelflife than Western types. For China and India, it would make sense to go for Il-76s as the ground infrastructure is already in place. The A400M was supposed to fill a gap between the C-130. Something larger than a C-130 but cheaper than a C-17.

  6. Embraer of brazil reported to built an aircraft that equally match the super hercules, it is an alternative called KC390..

    Marhalim: It remained a paper airplane….

  7. The stretched il-76 sounds good but it’s cargo bay is too narrow, newer military stuff just wont fit.

    I don’t understand will not buy a few used airliners as airborne tankers and cargo carriers. Most of the stuff we ship to lebanon are palletized anyway. Used Airbus A300 and 767 are selling at just above scrap value these days…

    Marhalim: Yes but the problem is that we need an airplane that has a back ramp so things could be driven off or parachuted from the back of them in emergencies. Personally I believe its better to buy the J Hercules, ie its cheaper around RM220 million each, so we could have two of them for one A400M.

    One of the main reason that the Hercules was nearly abandoned as the aircraft was too narrow to fit the newer, better armoured APCs so that was the one main design criteria for the A400M. But since we will never buy the bigger and of course more expensive APCs, technically we dont need the A400M! The only reason its still in the picture is the fact that without the project, CTRM’s product base will become smaller.

    Wonder what will they do if (and its a big if) the A400M is cancelled then?

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