Article Posted on : - Mar 06, 2010

The new military Airbus A400M transport plane

BERLIN (AP): The nations that have ordered the Airbus A400M military transporter have agreed to pay euro 3.5 billion more to address cost overruns and keep the trouble project alive, manufacturer EADS has said.

The agreement was worked out by deputy defence ministers and industry representatives in a meeting in the German capital, according to the German Defence Ministry and EADS NV.

EADS said in a statement on Friday that the two sides reached a "principle agreement" with the intention of amending the original contract in the "coming weeks."

As part of the deal, the seven customer nations _ Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey _ have agreed to increase the price of the contract by euro2 billion, and provide an additional euro1.5 billion in exchange for a share of future export sales, EADS said.

The nations also agreed help EADS cash flow by accelerating pre-delivery payments between 2010 and 2014, but an exact schedule has not yet been worked out, EADS said.

"EADS considers that this agreement provides a sound basis for a successful evolution of the A400M program," the company said. "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.