Airbus pressures Germany over A400M transporter deadlock

Airbus set itself on a potential collision course with the German government by signalling it might abandon a delayed €20 billion military project, but a top analyst called the move sabre-rattling.                                           

A source close to the planemaker said its chief executive was growing impatient over the impact on its jetliner business of the failure so far to agree a budget deal for the A400M transporter, which is dogged by delays and soaring costs.                                           

"Tom Enders is not willing to put the civil aviation business at Airbus at stake for the A400M," the source told Reuters on Tuesday.                                           

The comment came after German newspapers reported Airbus had drawn up contingency plans to scrap Europe's largest defence project, in a sign of its exasperation following months of inconclusive talks with seven European NATO buyers.                                           

Scrapping the deal could trigger repayments of more than €5 billion in government advances to nations that first commissioned the troop and heavy equipment carrier -- Germany, France, Britain, Spain, Belgium, Luxembourg and Turkey.                                           

But some executives involved in the project have floated the idea it would be better to swallow the penalties now and free up engineering resources for the next big civil challenge, the mid-sized A350, and stemming continued problems on the A380.                                           

EADS shares fell up to 1.5% in early trading and were down 0.71% at 1159 GMT.                                          

The A400M's maiden flight last month was two years behind schedule following delays in engine development and other snags that manufacturers blame partly on political interference.                                           

Airbus parent EADS has asked the buyers to come up with funds for increased production costs, but Germany has until now ruled out making concessions either on volume or price.                                           

A German defence ministry spokesman said the country is sticking with its plans to buy the A400M military transporter and wants an agreement with manufacturer Airbus by end-January.                                           

The official also said senior government officials from the A400M countries want to meet again by end-January.                                           

An EADS spokesman said talks were ongoing, nobody could forecast the outcome but everyone hoped the programme continued.