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A400M Contract Amendment Negotiations

Tue Mar 16, 2010 6:40 pm

Since the other thread

Airbus Threaten To Cancel A400M (by Daysleeper Jan 7 2010 in Military Aviation & Space Flight)

is over 300 posts long, and since Airbus is no longer threatening to cancel the A400M, and since the other thread has drifted off topic, let's start a new one to discuss the ongoing A400M contract negotiations.

EADS and the A400M customers have signed a basic agreement, but both parties say that contract will be amended within weeks or months, and there are many complex open issues that will be addressed via amendments.

In the last thread, Lumberton posted the following news:

Quoting Lumberton (Reply 308):
AW&ST has an update on the details still to be worked out on the "agreement". One of the unresolved issues is how many airframes will be canceled.

Settling A400M Contract Issues To Take Months

In summation, the article points out:


A) Even though a basic agreement has been signed the following issues still need to be resolved:

* Exactly how many A400Ms each country is buying
> FR is fully commited to 50
> UK is considering cutting 2-5 frames
> DE says it could weeks or months till they settle their total
> EADS is urging that the cuts be no more than 10 frames

* Exactly how legal labilities between the prime contractor and its suppliers will be resolved
> There is a dispute over EUR 500M between Airbus and EPI
> EPI is claiming EADS was late in delivering data needed for the FADEC development
> EADS CFO Ring hopes these can be resolved now that the basic agreement is in place
> EADS CEO Gallios warns discussions could drag out well beyond 2011

* Exactly who will be contributing to the EUR 1.SA)">5B "export levy facility"
> Government and industry sources put the A400M export potential at 300 units
> "Gallois suggests intense talks are underway with South Africa to get the former export customer back on board"

* Exactly what the repayment scheme will be for the EUR 1.SA)">5B "export levy facility"
> Money must be repaid but if the royalty payments are too high they will hurt export sales

* Exactly where the money will come from for the EUR 1.SA)">5B "export levy facility"
> France is considering creating a EUR 400B bond issue or tapping an existing aerospace fund
> No word on the other participants

* Exactly how much the accelerated predelivery payments will be

* How much military certification will cost
> The basic agreement only covers civil certification
> The military certification is more challenging than the civil certification

* Exactly what the aircraft delivery schedule will be
> FR gets 7 by end of 2014, 35 by end of 2020, 50 by end of 2024
> DE gets its first in 2014

* Exactly what the delivery schedule for enhanced capabilities will be
> There are three different deliveries planned largely based on delivery of more capable software

B) The impact on EADS:
* EADS is taking an EUR 4B loss on the core 180 unit program
* Auditors suggest another EUR 3.6B in program risk, but EADS feels they can manage the risk
* EADS will be subject to delay penalties if they do not meet the schedule in the revised agreement

C) Current testing status
* The first A400M is now splitting time between Toulouse and Seville in part to meet contract workshare requirements
* The second A400M is just about ready to join the flight test program


The things I found most interesting were the continued exposure EADS has with regards to vender lawsuits, managing risk to eliminate costs the auditors identified, the indeterminate number of frames to be bought, and future penalties should they not meet the newly agreed schedule.

Also the final shape of the "export levy facility" could be problematic. Much about its composition and funding remains to be determined. Basic math says EUR 1.SA)">5B over 300 frames is EUR 5M per frame, but repayment over 300 frames is mighty generous of the customers. Just the fact that Gallois is mentioning the efforts to get back the 8 SA frames shows how important even a small advance towards the 300 frame goal is.

The customers will be exposed if EADS does not meet the newly agreed schedule and if costs for military certification are not clearly spelled out.

[Edited 2010-03-16 11:46:55]
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RE: A400M Contract Amendment Negotiations

Tue Mar 16, 2010 6:53 pm

Quoting Revelation (Thread starter):
The things I found most interesting were the continued exposure EADS has with regards to vender lawsuits, managing risk to eliminate costs the auditors identified, the indeterminate number of frames to be bought, and future penalties should they not meet the newly agreed schedule.

Also the final shape of the "export levy facility" could be problematic. Much about its composition and funding remains to be determined. Basic math says EUR 1.SA)">5B over 300 frames is EUR 5M per frame, but repayment over 300 frames is mighty generous of the customers. Just the fact that Gallois is mentioning the efforts to get back the 8 SA frames shows how important even a small advance towards the 300 frame goal is.

Great points, and I agree, those are the most interesting points.

However, I just don't see how EADS can now give away and incentive package to SA for them to reorder 8 firm, and 6 option aircraft, esspecially since EADS was so "public" in their dispute with SA over why the order was cancelled. I don't see EADS being able to give the USAF enopugh incentive to buy 118 A-400s now, either.

Just where are these 300 international sales prospects for the A-400? Perhaps a better questionis what capabilities will the "new" A-400 have, and who will want them at the "new" price?
 
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RE: A400M Contract Amendment Negotiations

Tue Mar 16, 2010 7:37 pm

Quoting KC135TopBoom (Reply 1):
However, I just don't see how EADS can now give away and incentive package to SA for them to reorder 8 firm, and 6 option aircraft, esspecially since EADS was so "public" in their dispute with SA over why the order was cancelled.

I think SA has the incentive to keep the workshare. I think the past problems can be worked around. But I don't see EADS doing a "giveaway" kind of deal. Gallois has said the company will defend its cash reserve and its credit rating, and you don't do that by selling aircraft below cost. Also he doesn't want to establish a low price for this sale, because then the rest of the customers will want a similarly low price. Bottom line is there will be lots of talking needed to close this deal in a way that both parties can claim to have made a good deal. And if it closes, it'll be 8 down, 292 or more to go.

Quoting KC135TopBoom (Reply 1):
I don't see EADS being able to give the USAF enopugh incentive to buy 118 A-400s now, either.

Same reasoning applies.

Quoting KC135TopBoom (Reply 1):
Just where are these 300 international sales prospects for the A-400?

Someone at EADS braver than I predicted 1100 prospects between now and 2025:



AWST is projecting 300 sales, but not saying over what period these would happen.

Personally, I have a hard time seeing how this will happen in between now and 2025. For every two frames in the original batch, various export nations are expected to buy three frames?

Quoting KC135TopBoom (Reply 1):
Perhaps a better question is what capabilities will the "new" A-400 have, and who will want them at the "new" price?

I don't think that will be come clear till at least first delivery in 2013, maybe later.

And second order data like how much it costs to maintain the all-new EPI engines in military use will be even later.

Another great link from Lumberton implies:

- 2013: First delivery (not 2012, so now five years late)
- 2014: Air drop
- 2015: Ariel refueling
- 2016: Low-level flight with terrain following

So presuming things go to schedule there won't be any hard data about the full-blown A400M till 2016.

[Edited 2010-03-16 12:43:26]
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RE: A400M Contract Amendment Negotiations

Tue Mar 16, 2010 8:03 pm

Quoting Revelation (Reply 2):
Quoting KC135TopBoom (Reply 1):
Just where are these 300 international sales prospects for the A-400?

Someone at EADS braver than I predicted 1100 prospects between now and 2025:



AWST is projecting 300 sales, but not saying over what period these would happen.

Personally, I have a hard time seeing how this will happen in between now and 2025. For every two frames in the original batch, various export nations are expected to buy three frames?

Oh, I agree. They must be smoking some really good shit at EADS.

The chart shows sales of some 325 airplanes to customers like China and Russia, and 400 over all in NA, all by 2025?

On the bottom of the chart it says "plus deliveries of 192 A-400Ms to current customers". Obviously this is not an updated chart. They are predicting total sales of nearly 1300 airplanes in just 15 years.
 
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RE: A400M Contract Amendment Negotiations

Tue Mar 16, 2010 8:39 pm

Quoting KC135TopBoom (Reply 3):
Someone at EADS braver than I predicted 1100 prospects between now and 2025:
Quoting KC135TopBoom (Reply 3):
They are predicting total sales of nearly 1300 airplanes in just 15 years.

So the total market is about 1100 of which EADS hopes to sell 500.

Not unrealistic IMO looking the age of the current fleets and the lack of serious competition. (unless you think the KC390 is in the same segment)

http://www.airbusmilitary.com/Portals/1/Gallery/8-M-2010-001_low.jpg
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RE: A400M Contract Amendment Negotiations

Tue Mar 16, 2010 9:36 pm

Quoting keesje (Reply 4):
So the total market is about 1100 of which EADS hopes to sell 500.


The obsolete chart would imply that it's either 1300/500 or 1100/300.

It's obsolete because it includes the 192 initial order figure, which was true when the Italians were still in the program, which puts it somewhere around 2003.

As for the current AWST article, all that's being said is:

Quoting Revelation (Thread starter):
Government and industry sources put the A400M export potential at 300 units


The main issue with regard to contract negotiations is the repayment terms for the ELF ("export levy facility (tm)").

We don't know if the ELF must be paid in complete by a certain point in time, or if more money is to be paid based on time (i.e. something akin to interest is going to be charged).

Thus in turn we don't know how much will EADS need to tack on to the price of each A400M to repay the ELF, which will impact the price of the export A400Ms.

The sources in the article feel there's only another 300 export sales out there for EADS to gain, which means to recover the EUR 1.5 ELF EADS will presumably have to add EUR 5M to the price of each export A400M.

Unfortunately the sources don't bound this projection by time nor state the basis for the projection.

The article just tosses it out there as what its total projected sales are, presumably till A400M becomes obsolete.

Quoting keesje (Reply 4):
Not unrealistic IMO looking the age of the current fleets and the lack of serious competition.


Given the "founding fathers" are having a hard time keeping the initial order at 180 frames, I don't think it's realistic to see 300 export orders by 2025.

That'd be 20 new export orders a year for fifteen years starting right now, or 30 frames a year over 10 years after full functionality is achieved.

From the above, FR won't get all it's birds till end 2024, so one wonders exactly when delivery slots could be made available, and I presume the ELF will be repaid at delivery time, not order time, so ELF repayment depends on production rate.

I just chose the 2025 date arbitrarily from the chart.

It'll be interesting to find out when the ELF must be paid off, if ever.

I suspect that's one of the details that's still being negotiated.
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RE: A400M Contract Amendment Negotiations

Wed Mar 17, 2010 4:34 pm

Quoting keesje (Reply 4):
Quoting KC135TopBoom (Reply 3):
Someone at EADS braver than I predicted 1100 prospects between now and 2025:
Quoting KC135TopBoom (Reply 3):
They are predicting total sales of nearly 1300 airplanes in just 15 years.

So the total market is about 1100 of which EADS hopes to sell 500.

Not unrealistic IMO looking the age of the current fleets and the lack of serious competition. (unless you think the KC390 is in the same segment)

Actually, the first quote belongs to Revelation's reply #2.

But EADS may well indeed want to sell another 500 units. The question is who will buy them?

Quoting Revelation (Reply 2):
Quoting KC135TopBoom (Reply 1):
Just where are these 300 international sales prospects for the A-400?

Someone at EADS braver than I predicted 1100 prospects between now and 2025:
Quoting Revelation (Reply 5):
Quoting Revelation (Thread starter):
Government and industry sources put the A400M export potential at 300 units


The main issue with regard to contract negotiations is the repayment terms for the ELF ("export levy facility (tm)").

We don't know if the ELF must be paid in complete by a certain point in time, or if more money is to be paid based on time (i.e. something akin to interest is going to be charged).

Thus in turn we don't know how much will EADS need to tack on to the price of each A400M to repay the ELF, which will impact the price of the export A400Ms.

The sources in the article feel there's only another 300 export sales out there for EADS to gain, which means to recover the EUR 1.5 ELF EADS will presumably have to add EUR 5M to the price of each export A400M.

Unfortunately the sources don't bound this projection by time nor state the basis for the projection.

The article just tosses it out there as what its total projected sales are, presumably till A400M becomes obsolete.

If the possibility of anorther 300 units becomes a reality, that brings the total production run to 484 airframes. Is that enough to break even on a program currently at some 31B Euros (about $43.4B USD)?

Quoting Revelation (Reply 5):
From the above, FR won't get all it's birds till end 2024, so one wonders exactly when delivery slots could be made available, and I presume the ELF will be repaid at delivery time, not order time, so ELF repayment depends on production rate.

I just chose the 2025 date arbitrarily from the chart.

It'll be interesting to find out when the ELF must be paid off, if ever.

I suspect that's one of the details that's still being negotiated.

I have no doubt that EADS does not need to repay the entire 1.5B Euros ELF until the program is terminated, which may not be for 30 more years, or it could be next year. At this time, no one really knows, but I'm sure Keesje will tell us.

Keesje, in your picture, the second A-400 (closest to the camera and without the customer flags on it), has an open hatch or panel on top of the fuselage, at the trailing edge right wing root. Do you know what that panel or hatch is for? Perhaps maintnenace access to hydraulic or electrical systems? Or does it access the cargo compartment, possibly an emergency escape hatch?
 
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RE: A400M Contract Amendment Negotiations

Wed Mar 17, 2010 10:06 pm

Quoting KC135TopBoom (Reply 6):
Keesje, in your picture, the second A-400 (closest to the camera and without the customer flags on it), has an open hatch or panel on top of the fuselage, at the trailing edge right wing root. Do you know what that panel or hatch is for? Perhaps maintnenace access to hydraulic or electrical systems? Or does it access the cargo compartment, possibly an emergency escape hatch?

TB, I guess they are doing some testing on the APU..

http://www.airliners.net/photo/Airbu...-Industrie/Airbus-A400M/1620447/L/
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RE: A400M Contract Amendment Negotiations

Wed Mar 17, 2010 10:26 pm

Quoting keesje (Reply 7):
I guess they are doing some testing on the APU..

Wow, that looks like a pain in the butt to maintain; not very maintenance friendly if you need a crane to come pull out your APU when it needs changed...horrible decision to put it there IMO.
 
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RE: A400M Contract Amendment Negotiations

Thu Mar 18, 2010 2:04 pm

Quoting keesje (Reply 7):
Quoting KC135TopBoom (Reply 6):
Keesje, in your picture, the second A-400 (closest to the camera and without the customer flags on it), has an open hatch or panel on top of the fuselage, at the trailing edge right wing root. Do you know what that panel or hatch is for? Perhaps maintnenace access to hydraulic or electrical systems? Or does it access the cargo compartment, possibly an emergency escape hatch?

TB, I guess they are doing some testing on the APU..

http://www.airliners.net/photo/Airbu...47/L/

Thanks Keesje.

Quoting Galaxy5007 (Reply 8):
Wow, that looks like a pain in the butt to maintain; not very maintenance friendly if you need a crane to come pull out your APU when it needs changed...horrible decision to put it there IMO.

It does seem to be in an odd place. IIRC, the C-130, C-5, and C-17 (also the C-141) had/have their APUs in the wheel well sponsons. Maybe the sponsons on the A-400 have other things inside, besides the MLG?
 
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RE: A400M Contract Amendment Negotiations

Thu Mar 18, 2010 3:45 pm

Quoting KC135TopBoom (Reply 9):
It does seem to be in an odd place. IIRC, the C-130, C-5, and C-17 (also the C-141) had/have their APUs in the wheel well sponsons. Maybe the sponsons on the A-400 have other things inside, besides the MLG?

Either that or the APU is too big to fit in the gear pods and there really isn't any other place to put it. Although when they designed the aircraft, they could have easily made the sponsons bigger, as they did on the C-17.
 
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RE: A400M Contract Amendment Negotiations

Thu Mar 18, 2010 3:51 pm

Quoting Galaxy5007 (Reply 10):
Either that or the APU is too big to fit in the gear pods and there really isn't any other place to put it. Although when they designed the aircraft, they could have easily made the sponsons bigger, as they did on the C-17.

IIRC, the original C-17A design (before the ER version) had a longer left side sponson, which housed the APU. When the C-17ER version came out, the right side sponson was lenghtened to the same size of the left side. But I don't know if anything is inside the right sponson extension, or if it is an empty dry bay.
 
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RE: A400M Contract Amendment Negotiations

Thu Mar 18, 2010 5:45 pm

Quoting KC135TopBoom (Reply 11):
IIRC, the original C-17A design (before the ER version) had a longer left side sponson, which housed the APU. When the C-17ER version came out, the right side sponson was lenghtened to the same size of the left side. But I don't know if anything is inside the right sponson extension, or if it is an empty dry bay.

You have your sides reversed; the right side has the APU (Aircraft Right). The left side was only lengthened on a few birds; even the new builds coming off the line still have a shorter pod on the left side. The rumor I heard is that it was originally attempted to put a fuel tank in that pod, but that idea was thrown out due to safety concerns. Regardless, all of the new builds are considered ERs, and have the short sponson on the left side. http://www.airliners.net/photo/USA--...oeing-C-17A-Globemaster/1615439/L/ this picture of 7182 shows that the left side is considerably shorter than the right.
 
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RE: A400M Contract Amendment Negotiations

Thu Mar 18, 2010 7:38 pm

You want to sell 300+ units. Negotiate with China to open a line in Shanghai to license build the A400. China would be responsible to pay for the labor and materials and EADS gets a 30 million Euro fee for each copy. I know this is a crazy idea but I figured I would throw it out there.
 
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RE: A400M Contract Amendment Negotiations

Fri Mar 19, 2010 10:03 am

Quoting Revelation (Thread starter):
* Exactly how many A400Ms each country is buying
> FR is fully commited to 50
> UK is considering cutting 2-5 frames
> DE says it could weeks or months till they settle their total

In German Defense Cuts Loom as Merkel Fights Record Budget Deficit we find:

Quote:

German lawmakers beginning four days of budget debate in Berlin today are preparing to cut defense spending by 1.5 percent, or 450 million euros ($617 million) this year, parliamentary documents show. That includes 100 million euros less for European Aeronautic, Defence and Space Co.’s A400M plane and cuts to the NH90 helicopter, made by a group including EADS’s Eurocopter SA unit and Finmeccanica SpA’s AgustaWestland.

“These are prestigious projects,” Jan Techau, an analyst at the NATO Defense College in Rome, said in a phone interview. “You could say if the Germans aren’t able to afford it, who can?” At the same time, Merkel’s coalition says “the budget is so strained, you have to take it from somewhere.”

DE was in for 60 frames when the program was causing the customers EUR 20B.

For round figures that was 20B / 180 = EUR 111M per frame.

So let's presume DE was into the program for 60 * 111M = 6.6B total.

After recent increases it's EUR 23.5B / 180 = EUR 130M per frame.

And from the above, they're taking 100M off the table too.

So we can project that DE will be spending 6.5B total at 130M per frame.

Which would lead to DE taking 50 frames instead of 60.
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RE: A400M Contract Amendment Negotiations

Fri Mar 19, 2010 2:55 pm

Quoting Revelation (Reply 14):
DE was in for 60 frames when the program was causing the customers EUR 20B.

For round figures that was 20B / 180 = EUR 111M per frame.

So let's presume DE was into the program for 60 * 111M = 6.6B total.

After recent increases it's EUR 23.5B / 180 = EUR 130M per frame.

And from the above, they're taking 100M off the table too.

So we can project that DE will be spending 6.5B total at 130M per frame.

Which would lead to DE taking 50 frames instead of 60.

That would be assuming EADS would eat the remaining difference between the increase to 23.5B Euros and the known current costs of 31 B Euros of the program. It also assumes that German still gets all the features they originally wanted. That 7.5B Euro difference is going to come from somewhere. Fewer firm orders will not cover it, and a unit price increase may reduce the number of units even more, and not only from Germany as I doubt the UK can afford much more of a unit price increase without reducing their order for 25.
 
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RE: A400M Contract Amendment Negotiations

Fri Mar 19, 2010 5:32 pm

Quoting KC135TopBoom (Reply 15):
That would be assuming EADS would eat the remaining difference between the increase to 23.5B Euros and the known current costs of 31 B Euros of the program.

EADS has already written off EUR 4.2B and claims it can find a way to save another 3.6B.

This is mentioned above:

Quoting Revelation (Thread starter):

B) The impact on EADS:
* EADS is taking an EUR 4B loss on the core 180 unit program
* Auditors suggest another EUR 3.6B in program risk, but EADS feels they can manage the risk

Not sure if this is how it will end up.

It's pretty certain that EADS is just going to eat the 4.2B EUR it's already written off.

How much of the 3.6B savings they can achieve is yet to be determined.

Note that:

Quoting Revelation (Thread starter):
> EADS is urging that the cuts be no more than 10 frames

10 frames are 5.5% of the 180 frame run.

The customers are putting an extra 3.5B on the table which is a 17.5% price increase which in theory could be eliminated by an order reduction of 31.5 frames, a lot more than the 10 that EADS is urging.
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RE: A400M Contract Amendment Negotiations

Fri Mar 19, 2010 7:40 pm

So EADS expects to sell 400 frames in NA? I am wondering where they expect this to happen. Canada has already voted with our limited funds, 4 C-17s thank you. Mexico is questionable, and so is the US. I'm sure the USAF could find a use for the aircraft, but with recent push orders from Congress for more C-17s I really don't see it happening unless the USAF has a very specific need that is full filled here. Well as said this is an old chart so it's basically irrelevant. Interesting saga really, and too bad as the Aircraft itself is quite interesting.
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RE: A400M Contract Amendment Negotiations

Fri Mar 19, 2010 9:47 pm

Quoting 727200er (Reply 19):
So EADS expects to sell 400 frames in NA?

No. They see a market requirement for A400M type aicraft in NA. They hope to sell 500 A400M's worldwide.

   It's brand new technology in all areas
   It can cruise at M .7 at 40.000 ft over long distances
   It can night fly low and fast without VFR
   It can be put down on real soft & short strips
   It is autonomous on the ground & can unload itself with minimum crew
   It can refuel helicopters
   It can refuel fighters
   It can move serious vehicles & medium helicopters  

There's no existing aircraft that can do all. A clean sheet design would be necessary to compete.

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RE: A400M Contract Amendment Negotiations

Sat Mar 20, 2010 3:07 am

Quoting keesje (Reply 20):
It's brand new technology in all areas
It can cruise at M .7 at 40.000 ft over long distances
It can night fly low and fast without VFR
It can be put down on real soft & short strips
It is autonomous on the ground & can unload itself with minimum crew
It can refuel helicopters
It can refuel fighters
It can move serious vehicles & medium helicopters

It also has not demonstrated any of those capabilities yet. It has reached .7 M at FL-400, but only foir a short test flight. EADS has said some capabilities will not be met and some will have to come much later.
 
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RE: A400M Contract Amendment Negotiations

Sat Mar 20, 2010 11:56 am

Quoting KC135TopBoom (Reply 21):
It also has not demonstrated any of those capabilities yet.

Somehow 787, A400M, 747-8 & A350 sold 1500 before they flew. Apparently paper prove has some value from some OEM's..

Which Airbus or Boeing projects failed to meet their targets in recent decades? MD11 initially.. ?
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RE: A400M Contract Amendment Negotiations

Sat Mar 20, 2010 2:24 pm

Quoting keesje (Reply 20):

It's brand new technology in all areas
It can cruise at M .7 at 40.000 ft over long distances
It can night fly low and fast without VFR
It can be put down on real soft & short strips
It is autonomous on the ground & can unload itself with minimum crew
It can refuel helicopters
It can refuel fighters
It can move serious vehicles & medium helicopters

There's no existing aircraft that can do all.

Correct, and as KCTB points out, the A400M can't do so either, yet, and depending on how the negoitations go, perhaps never.

To try to keep this thread focused, do you have any more info on when it may do some of these things?

The best info we have is:

Quoting Revelation (Thread starter):

- 2013: First delivery (not 2012, so now five years late)
- 2014: Air drop
- 2015: Ariel refueling
- 2016: Low-level flight with terrain following

And EADS has quite often hinted that "night fly low and fast without VFR" is one of the things that is driving the cost of the A400M so high.

OTOH it's one thing that DE in particular insists on keeping in the program.
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RE: A400M Contract Amendment Negotiations

Sat Mar 20, 2010 4:24 pm

Quoting keesje (Reply 22):
Which Airbus or Boeing projects failed to meet their targets in recent decades? MD11 initially.. ?

The MD-11 was not a Boeing project, it was an MDD project develpoed before Boeing bought them out. You may have noticed that Boeing ended production of the MD-11? It was in all the newspapers.

Quoting keesje (Reply 22):
Somehow 787, A400M, 747-8 & A350 sold 1500 before they flew. Apparently paper prove has some value from some OEM's..

Would the A-400 have sold 180 airframes if they were not bought by the company owners? How many A-350s have the EU governments bought?

Quoting Revelation (Reply 23):
Correct, and as KCTB points out, the A400M can't do so either, yet, and depending on how the negoitations go, perhaps never.

To try to keep this thread focused, do you have any more info on when it may do some of these things?

Perhaps, Revelation, you should have asked him for recent info, not some link from 4 years ago that is no longer relevent. Maybe some info no older than about one month? Keesje has a habit of using very old links to support his information, as he likes to live in the past.
 
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RE: A400M Contract Amendment Negotiations

Sat Mar 20, 2010 5:03 pm

Quoting KC135TopBoom (Reply 24):
The MD-11 was not a Boeing project, it was an MDD project develpoed before Boeing bought them out. You may have noticed that Boeing ended production of the MD-11? It was in all the newspapers.

Yes, and the same is true for C-17.

Quoting KC135TopBoom (Reply 24):
Perhaps, Revelation, you should have asked him for recent info

Yes, I do want up to date info.

From what I can tell some do hold a vision of the current A400M based on what it was supposed to become, which is their right.

And it seems the current contract allows for an A400M that can get to the original goals but after much more money and time has been invested.

That's another interesting thing about the current state of the contract. It allows folks to say pretty much anything they want to say about the A400M till all the amendments are made, when we should know a lot more about what the A400M will actually be.
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RE: A400M Contract Amendment Negotiations

Sat Mar 20, 2010 6:59 pm

Quoting Revelation (Reply 25):
That's another interesting thing about the current state of the contract. It allows folks to say pretty much anything they want to say about the A400M till all the amendments are made, when we should know a lot more about what the A400M will actually be.

Could not have said it better myself.

This is the thing, if the plane is capable of all these things, then great! Unfortunately even EADS says it ain't gonna happen soon. Too bad really as some of these things are what make the plane so interesting, and without them it's just a compromise in capability between the C-17 and C-130J. I'm still looking forward to the final word when the negotiations are settled.
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RE: A400M Contract Amendment Negotiations

Sat Mar 20, 2010 7:21 pm

Quoting Revelation (Reply 25):
Quoting KC135TopBoom (Reply 24):
The MD-11 was not a Boeing project, it was an MDD project develpoed before Boeing bought them out. You may have noticed that Boeing ended production of the MD-11? It was in all the newspapers.

Yes, and the same is true for C-17.

The C-17 was developed well before the Boeing buyout; but C-17s are still selling and rolling off the production line....not the same in that sense.
 
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RE: A400M Contract Amendment Negotiations

Mon Mar 22, 2010 4:29 pm

Quoting keesje (Reply 35):
Quoting Revelation (Reply 14):
DE was in for 60 frames when the program was causing the customers EUR 20B.

For round figures that was 20B / 180 = EUR 111M per frame.

So let's presume DE was into the program for 60 * 111M = 6.6B total.

After recent increases it's EUR 23.5B / 180 = EUR 130M per frame.

or about $176.000.000 per A400M at current exchange rates..

I think the part you didn't quote right after is more on-topic.

Quoting Revelation (Reply 14):

So we can project that DE will be spending 6.5B total at 130M per frame.

Which would lead to DE taking 50 frames instead of 60.

It seems DE is cutting back A400M by EUR 100M which isn't a lot compared to the EUR 6.5B they have directed towards the program, but it is a move in the wrong direction

What will happen if DE chooses to fund 50 frames instead of 60?

EADS will have 5.5% fewer A400M frames to build which will save some cash, but also 5.5% fewer frames to amortize project costs against, and 5.5% fewer frames to support the profitable maintenance and training programs.
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RE: A400M Contract Amendment Negotiations

Mon Mar 22, 2010 6:50 pm

Please keep the discussion to about the A400M, not the C-17. If you wish to discuss the C-17 in regards to the A400M, do so in separate thread.
 
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RE: A400M Contract Amendment Negotiations

Mon Mar 22, 2010 7:07 pm

Quoting astuteman (Reply 39):
Who says the A400M won't in time turn around to be a great success, just like the C17?

It very well might be, and I certainly hope it will be, especially in terms of value delivered to the taxpayer.

The problem is that no one knows what A400M will be, although some here act as if they do.

Seems we have some agreement about the size of the bill and some agreement about how the bill will be paid, but no clear statement about what will be delivered and when it'll be delivered.

I've tried to gather whatever public information is out there beyond the "basic agreement", but most of it is in the form of published rumor as opposed to press release.

Most sources are now saying the "amendments" will take months rather than weeks.

BTW since I can't keep people off comparing to the C-17, I'll add that the oft-quoted source also states:

Quote:

By accepting the 1993 terms, McDonnell Douglas incurred a loss of nearly US$1.5 billion on the development phase of the program.

And using the US Inflation Calculator, I find that USD 1.5B in 1993 dollars is USD 2.25B in 2010 dollars.

Whereas the A400M write off is at EUR 4.2B which is USD 5.7B in 2010 dollars and she's around three years away from first delivery.

Some are emphasizing that the A400M is a less expensive aircraft, which makes the cost overruns that are already twice the C-17's write offs that much more of a hole for EADS to dig itself out of, no?

[Edited 2010-03-22 12:08:57]
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RE: A400M Contract Amendment Negotiations

Mon Mar 22, 2010 8:59 pm

Quoting Revelation (Reply 28):
The problem is that no one knows what A400M will be, although some here act as if they do.

I don't think that is really the case. EADS knows what capabilities they cannot deliver in the initial tranche and they know how overweight the airframe is and can perform a guestimate on how that will affect performance, the final figures which will become known as the plane continues it's flight test program.
 
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RE: A400M Contract Amendment Negotiations

Mon Mar 22, 2010 9:52 pm

Quoting Stitch (Reply 29):
I don't think that is really the case. EADS knows what capabilities they cannot deliver in the initial tranche and they know how overweight the airframe is and can perform a guestimate on how that will affect performance, the final figures which will become known as the plane continues it's flight test program.

Right, I'm sure EADS has a good idea what they can and cannot do technically, and they will know even more with time, but the links in #0 and #2 point out that almost every detail about what is being purchased and when it will be delivered are still being negotiated, so no one can say they know much about what actually will be delivered.

Ref 1: http://www.aviationweek.com/aw/gener...To%20Take%20Months&channel=defense

Ref 2: http://www.defensenews.com/story.php?i=4529774&c=EUR&s=AIR
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RE: A400M Contract Amendment Negotiations

Tue Mar 23, 2010 4:12 pm

Quoting Revelation (Reply 30):
I'm sure EADS has a good idea what they can and cannot do technically, and they will know even more with time,

Correct, however, their current experience is most based on commerical aircraft, not military. I agree as EADS gains more experience and confidence in their capability of building military aircraft with military capabilities, things will get better and easier for them.

Right now, they need to develope the basic A-400, then later go onto developing additional mission capabilities for it.
 
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RE: A400M Contract Amendment Negotiations

Tue Mar 23, 2010 4:50 pm

Well the AviationWeek article just mentions how many aircraft each air force will take and how Airbus Military and it's suppliers will work out there lawsuits and compensation claims against each other. I didn't see anything relating to A400M performance metrics.

The Defense News article mentions most the same, but it does note that:

"The overall agreement also provides for a staged delivery of capabilities, with an initial operating capability of the basic transport mission, followed by air drop, aerial refuelling and finally low-level flight and automatic terrain following, with a year needed for each new capability."

So it looks like the EU air forces do know what will be delivered and when.
 
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RE: A400M Contract Amendment Negotiations

Tue Mar 23, 2010 5:12 pm

Quoting KC135TopBoom (Reply 31):
Right now, they need to develope the basic A-400, then later go onto developing additional mission capabilities for it.

It'll be interesting to see if countries can "opt out" of the later tranches or not.

Quoting Stitch (Reply 32):
Well the AviationWeek article just mentions how many aircraft each air force will take and how Airbus Military and it's suppliers will work out there lawsuits and compensation claims against each other. I didn't see anything relating to A400M performance metrics.

Indeed. Hopefully that means Airbus has put the time to good use and can meet the original performance metrics, but seeing that it says nothing about what performance metrics will be met, we really can't say, can we?

Quoting Stitch (Reply 32):
The Defense News article mentions most the same, but it does note that:

"The overall agreement also provides for a staged delivery of capabilities, with an initial operating capability of the basic transport mission, followed by air drop, aerial refuelling and finally low-level flight and automatic terrain following, with a year needed for each new capability."

So it looks like the EU air forces do know what will be delivered and when.

I hope they do but that statement doesn't sound too definitive to me. I think the details will really be worked out in the amendments to the basic agreement.
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RE: A400M Contract Amendment Negotiations

Tue Mar 23, 2010 7:02 pm

Quoting Revelation (Reply 33):
Quoting Stitch (Reply 32):
The Defense News article mentions most the same, but it does note that:

"The overall agreement also provides for a staged delivery of capabilities, with an initial operating capability of the basic transport mission, followed by air drop, aerial refuelling and finally low-level flight and automatic terrain following, with a year needed for each new capability."

So it looks like the EU air forces do know what will be delivered and when.


I hope they do but that statement doesn't sound too definitive to me. I think the details will really be worked out in the amendments to the basic agreement.

What will be the additional costs for each new capability?
 
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RE: A400M Contract Amendment Negotiations

Tue Mar 23, 2010 10:53 pm

Quoting KC135TopBoom (Reply 31):
Correct, however, their current experience is most based on commerical aircraft, not military. I agree as EADS gains more experience and confidence in their capability of building military aircraft with military capabilities, things will get better and easier for them.

I think we Europe has been building militairy aircraft for 100 years under dozens of legendary brands, mergers and multinational projects, but the with the same people, continuously. It's not like EADS / Airbus were founded one day "lets build aircraft"   
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RE: A400M Contract Amendment Negotiations

Wed Mar 24, 2010 1:33 pm

Quoting keesje (Reply 35):
Quoting KC135TopBoom (Reply 31):
Correct, however, their current experience is most based on commerical aircraft, not military. I agree as EADS gains more experience and confidence in their capability of building military aircraft with military capabilities, things will get better and easier for them.

I think we Europe has been building militairy aircraft for 100 years under dozens of legendary brands, mergers and multinational projects, but the with the same people, continuously.

Correct, but did all that "cooperate knowledge" transfer to EADS? No, it did not. EADS will one day make very good and reliable military aircraft, I have no doubt of that. But today is not that day.

Quoting keesje (Reply 35):
It's not like EADS / Airbus were founded one day "lets build aircraft"

Actually, that is what happened back in the 1960s. It was then SAS/Airbus, and the mergers began. I might point out that Europes greatests aircraft like Concord, Lancaster Bomber, Sptifire, Bf-109, FW-190, and others were not EADS products.
 
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RE: A400M Contract Amendment Negotiations

Wed Mar 24, 2010 2:03 pm

Quoting KC135TopBoom (Reply 36):
I might point out that Europes greatests aircraft like Concord, Lancaster Bomber, Sptifire, Bf-109, FW-190, and others were not EADS products.

But nearly all companies which built those which built those aircraft, and in consequence, the engineers who built them, ended up in the EADS.    Your argument is upside down.
Exceptions confirm the rule.
 
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RE: A400M Contract Amendment Negotiations

Wed Mar 24, 2010 2:21 pm

Quoting Revelation (Reply 28):
BTW since I can't keep people off comparing to the C-17, I'll add that the oft-quoted source also states:

Quote:

By accepting the 1993 terms, McDonnell Douglas incurred a loss of nearly US$1.5 billion on the development phase of the program.


And using the US Inflation Calculator, I find that USD 1.5B in 1993 dollars is USD 2.25B in 2010 dollars.

Whereas the A400M write off is at EUR 4.2B which is USD 5.7B in 2010 dollars and she's around three years away from first delivery.

Some are emphasizing that the A400M is a less expensive aircraft, which makes the cost overruns that are already twice the C-17's write offs that much more of a hole for EADS to dig itself out of, no?

Naughty Boy. And not yet banned either.   
Depends on the flag, I guess.....

I'll take the advice/instruction offered and respond elsewhere

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RE: A400M Contract Amendment Negotiations

Wed Mar 24, 2010 6:29 pm

Quoting astuteman (Reply 38):
Quoting Revelation (Reply 28):
BTW since I can't keep people off comparing to the C-17, I'll add that the oft-quoted source also states:

Quote:

By accepting the 1993 terms, McDonnell Douglas incurred a loss of nearly US$1.5 billion on the development phase of the program.


And using the US Inflation Calculator, I find that USD 1.5B in 1993 dollars is USD 2.25B in 2010 dollars.

Whereas the A400M write off is at EUR 4.2B which is USD 5.7B in 2010 dollars and she's around three years away from first delivery.

Some are emphasizing that the A400M is a less expensive aircraft, which makes the cost overruns that are already twice the C-17's write offs that much more of a hole for EADS to dig itself out of, no?

Naughty Boy. And not yet banned either.
Depends on the flag, I guess.....

I'll take the advice/instruction offered and respond elsewhere

rgds

Oh, of course, ban everyone who is critical of EADS?

He makes a valid point.

So can we now get back to the details of the sales contracts EADS is dictating to the European customers?
 
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RE: A400M Contract Amendment Negotiations

Wed Mar 24, 2010 7:57 pm

Quoting KC135TopBoom (Reply 39):
Oh, of course, ban everyone who is critical of EADS?

Funnily enough, my tongue-in-cheek point was more aimed at the fact that a post that IS critical of EADS has been left in (and riddled with inaccuracies too, but it has been pointed out that this thread is not the place) whilst those which tried to defend EADS have all been deleted.

Happy now?  

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RE: A400M Contract Amendment Negotiations

Wed Mar 24, 2010 9:34 pm

Quoting KC135TopBoom (Reply 36):
Actually, that is what happened back in the 1960s. It was then SAS/Airbus, and the mergers began. I might point out that Europes greatests aircraft like Concord, Lancaster Bomber, Sptifire, Bf-109, FW-190, and others were not EADS products.

Irrelevant, it were the same folks & facilities. The knowledge/ experience was there.

- FW190:
Focke-Wulf merged with Weserflug into Vereinigte Flugtechnische Werke and was taken over by Messerschmitt-Bölkow-Blohm (MBB)

- Bf-109:
Messerschmitt merged with Bolkow Blom which became DASA and later on EADS

- Concordes:
were build by British Aerospace/Airbus in Bristol until 1979.

- Spitfire:
Supermarine was taken over by Vickers -> British Aircraft Corporation later merged into BAe a major Airbus contribuor (But also Tornado, Jaguar, Eurofighter, Goshawk, Harrier)

The seniors working/ on Airbus design in the sixties /seventies worked on amazing projects 30 years earlier (as far as they had not been "relocated" to the USA / USSR or moved to Sweden / S. America)

The North American P-86 Sabre was the first American aircraft to take advantage of flight research data seized from the German aerodynamicists at the end of the war.[3] Performance requirements were met by incorporating a 35 degree swept-back wing with automatic slats into the design, using the Me 262 wing profile, Messerschmitt wing A layout and adjustable stabilizer.[4][5] Manufacturing was not begun until after World War II as a result.
http://en.wikipedia.org/wiki/F-86_Sabre .

Quoting KC135TopBoom (Reply 36):
Correct, but did all that "cooperate knowledge" transfer to EADS? No, it did not. EADS will one day make very good and reliable military aircraft, I have no doubt of that. But today is not that day.

I think that is an odd, insulting opinion, supported by few.
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RE: A400M Contract Amendment Negotiations

Wed Mar 24, 2010 11:00 pm

Quoting keesje (Reply 41):
The seniors working/ on Airbus design in the sixties /seventies worked on amazing projects 30 years earlier (as far as they had not been "relocated" to the USA / USSR or moved to Sweden / S. America)

The North American P-86 Sabre was the first American aircraft to take advantage of flight research data seized from the German aerodynamicists at the end of the war.[3] Performance requirements were met by incorporating a 35 degree swept-back wing with automatic slats into the design, using the Me 262 wing profile, Messerschmitt wing A layout and adjustable stabilizer.[4][5] Manufacturing was not begun until after World War II as a result.

Correct, most of the German scientists who developed aircraft and rockets went to the US or USSR. Very few of them returned to Europe later in their lives to live, or work for SAS/Airbus, but most went back for visits.

Beleive it or not, but some even went to work for Boeing and worked on aircraft like the B-47, B-52, and B-367-80, which developed into the B-707 and KC-135. A few went to work for Lockheed Skunk Works and developed the F-104, U-2 and YF-12/SR-71, and a few worked on the C-130 program at Lockheed in the early 1950s.
 
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RE: A400M Contract Amendment Negotiations

Tue Mar 30, 2010 10:15 am

Looks like, with the new pricing, the Royal Air Force will take 22 instead of 25 A400Ms:

http://www.businessweek.com/news/201...ll-take-part-in-loan-correct-.html
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RE: A400M Contract Amendment Negotiations

Tue Mar 30, 2010 12:49 pm

Quoting N328KF (Reply 43):
Looks like, with the new pricing, the Royal Air Force will take 22 instead of 25 A400Ms:

Seems a pragmatic approach to me. They can cancel 1, 2 or 3 to keep the budget tight. Or order additional ones later on. ( as happened to the USAF C-17 after the order was cut back to 120 long ago).
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RE: A400M Contract Amendment Negotiations

Tue Mar 30, 2010 1:07 pm

Quoting keesje (Reply 44):
Seems a pragmatic approach to me. They can cancel 1, 2 or 3 to keep the budget tight. Or order additional ones later on. ( as happened to the USAF C-17 after the order was cut back to 120 long ago).

All of this while they are adding C-17s? I would say that the RAF has decided that the low/medium/high mix is best for them.
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RE: A400M Contract Amendment Negotiations

Tue Mar 30, 2010 1:18 pm

Quoting N328KF (Reply 45):
All of this while they are adding C-17s? I would say that the RAF has decided that the low/medium/high mix is best for them.

I think the relatively low number of A400m's they ordered compared to Germany and France has indeed to do with their C-17s, MRTT's and C130J's, although all have very different transport capabilities.

They need A400Ms, the MoD last week announced plans to build armoured vehicles and light tanks for the army in a deal potentially worth £9bn. http://www.guardian.co.uk/business/2...rtanker-air-force-pfi-audit-office
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RE: A400M Contract Amendment Negotiations

Tue Mar 30, 2010 2:05 pm

Quoting keesje (Reply 44):
Quoting N328KF (Reply 43):
Looks like, with the new pricing, the Royal Air Force will take 22 instead of 25 A400Ms:

Seems a pragmatic approach to me. They can cancel 1, 2 or 3 to keep the budget tight. Or order additional ones later on. ( as happened to the USAF C-17 after the order was cut back to 120 long ago).

We shall see, won't we?

Quoting keesje (Reply 46):
They need A400Ms, the MoD last week announced plans to build armoured vehicles and light tanks for the army in a deal potentially worth £9bn. http://www.guardian.co.uk/business/2...ffice

Do we know the sizes of each different vehicle model? Will some fit in the C-130J/J-30 and others fit in the A-400? That will still leave the RAF C-17s to carry twice as many of the new vehicles as the A-400 can, per mission. In the end, the RAF may have as many as 12 C-17s before they get all 22 A-400s, which gives them about the same carrying capacity in each fleet.
 
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RE: A400M Contract Amendment Negotiations

Tue Mar 30, 2010 6:16 pm

Quoting keesje (Reply 18):
They hope to sell 500 A400M's worldwide.
Quoting keesje (Reply 44):
Quoting N328KF (Reply 43):
Looks like, with the new pricing, the Royal Air Force will take 22 instead of 25 A400Ms:

Seems a pragmatic approach to me. They can cancel 1, 2 or 3 to keep the budget tight. Or order additional ones later on. ( as happened to the USAF C-17 after the order was cut back to 120 long ago).

Yes, but it'd be easier to get to 500 if they didn't loose orders from the home market:

Germany Weighs ‘Slight’ Reduction in A400M Orders

Quote:

Germany may make a “slight” cut in its order of 60 A400M military transporters and take delivery of the planes without their ability to perform automated low- flight maneuvers, a defense ministry official said.

So, the UK is not taking 3/25 or 12% of their order.

If Germany made a similar cut, it'd be 7 of 60.

I suspect it'll be in that range or less, but who knows?

It's also interesting that everyone is now saying that terrain following is going to happen after initial deliveries.

Quoting N328KF (Reply 45):
I would say that the RAF has decided that the low/medium/high mix is best for them.

To stay focused on the A400M negotiations, I'll just point out that the Bloomberg article points out that the UK won't get it's first A400M till 2015. It doesn't say when they will get the 22nd but it does say France won't get its 50th till 2024.
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RE: A400M Contract Amendment Negotiations

Tue Mar 30, 2010 8:56 pm

Quoting KC135TopBoom (Reply 47):
Quoting keesje (Reply 46):
They need A400Ms, the MoD last week announced plans to build armoured vehicles and light tanks for the army in a deal potentially worth £9bn. http://www.guardian.co.uk/business/2...ffice

Do we know the sizes of each different vehicle model? Will some fit in the C-130J/J-30 and others fit in the A-400? That will still leave the RAF C-17s to carry twice as many of the new vehicles as the A-400 can, per mission

No, its the open competition in which US General Dynamics beat UK BAE (-500 jobs) to win the light tank deal, replacing the Scimitars in the British Army. http://news.bbc.co.uk/2/hi/business/8580266.stm

A400M can transport medium tanks directly from the UK at high speed and deliver them at night at short unprepared strips in places like Afghanistans. The C-130J, nor the C-17 has that capability.
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