Article Posted on : - Apr 08, 2011

A400M military transport plane.

SEVILLE (AFP): The seven NATO partner nations backing the Airbus A400M military transport plane signed the final contract for the financing of the project on Thursday, Airbus said.

Airbus Military's parent company EADS had threatened to pull the plug on Europe's biggest defence project unless the partner nations stumped up more cash to cover cost overruns of about 5.2 billion euros.

Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey agreed the project in 2003 and it was meant to showpiece Europe's independence from US defence suppliers.

The deal on the financing of the long-delayed A400M, which can carry troops, armoured vehicles and helicopters and land on short, unprepared runways, was signed at Airbus Military's facility in the southwestern Spanish city Seville where the plane is built.

"Today we conclude a long and difficult process ...with today's signature (we) put back on track a major cooperative programme," said Patrick Bellouard, head of the Occar consortium that groups the seven nations.

The deal, which amends the original 20-billion-euro contract signed in 2003, was also signed by Domingo Urena, the chairman of Airbus Military.

Development of the A400M aircraft, built to replace ageing military cargo carriers in several European air forces, fell behind schedule due mainly to problems with the construction of its huge turbo-prop engines.

The plane's first test flight was carried out in Spain in December 2009, nearly two years behind schedule.

Last month, Airbus Military completed tests in France to determine the lowest speed which the A400M can take-off.

The first deliveries are not now expected until at least early 2013.

Airbus Military has received orders for 170 A400M planes. Germany has ordered 53 planes, France 50 and Britain 22.

In November 2009, South Africa dropped its order for A400M planes because of the cost overruns and development delays.

The military transport plane market is currently dominated by Lockheed Martin's C-130 Hercules turbo-prop and Boeing's C-17 jet aircraft.