What Next for Callsign Grizzly 1
There are as yet unknown tribes in the deepest recesses of the Amazon basin who have heard that the A400 has taken its first flight today. The mainstream media, web channels and blogosphere have exploded with news of the maiden flight in Seville this afternoon, callsign Grizzly 1.
MSN001 completed a longer than expected flight and Airbus reported all system performed as expected. Analysis of test data will be carried out before the net series of flights. Other aircraft will join the test programme over the next months and years as the aircraft strives for service. The first deliveries will be to France and these first aircraft may not be capable of the full spectrum of flight operations.
This is good news and the scale of the achievement should not be underestimated but amidst the sunshine of the first flight in Seville dark clouds stubbornly refuse to disperse.
Whilst the flight was in progress various defence ministers and officials from EADS and Airbus Military were trying, yet again, to thrash out a deal that tries to balance the competing requirements of a fixed price contract against the reality of cost and time over runs.
The original €20 billion development costs are certain to be significantly more and EADS and Airbus have indicated that at the original fixed prices the programme would not be possible to compete. France and Spain have indicated they are willing to look at pricing and specification issues but Germany and the UK seem to be sticking to their guns, a fixed price contract is a fixed price contract. If it is cancelled, EADS could face penalty charges of nearly €6 billion, crippling. Given that the whole programme is so riven with politics and competing industrial concerns it is unlikely that it will be cancelled and some form of compromise on numbers, support, payment profile or future options is the most likely outcome.
The most likely cost increase seems to be in the order of 25%.
In a parallel exercise in wishful thinking Sean O’Keefe, the EADS North America Chief Executive, outlined a number of factors that he believes will send the USAF to his doors with a purchase order for the A400. I actually agree with the analysis of need, the A400 (assuming it continues) would make sense as a replacement for their C130 fleet as the US Army has the same crushing reality check regarding vehicle size and weight as the European nations have. With the continuing turmoil over the USAF tanker programme and the natural resistance to a non homegrown aircraft fleet, common sense won’t come into it, politics will intervene, as usual.
The decision to proceed or not is a real tough one, readers of this blog will know we think the specification and capability that the A400 will deliver are vital to the maintenance of an effective, modern and versatile logistics fleet alongside the C17 and A330. As much as the C130 has and continues to give sterling service it is reaching the end of its useful life, like the Land Rover or Bedford.
As useful as we think it will be the decision has to come down to cost, especially given the likely MoD budget cuts in the next few years and the £6 billion black hole reported today.
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That is a good one, be interesting to see if Gordon is prepared to push over this.
A share in EADS is currently $20
£6b in penelty charges is 450m shares.
There a currently only 811m shares in EADS
Realistically, we should demand 50% ownership of EADS over this.
Will Brown?
Anyone else seen this on Reuters?
http://www.reuters.com/article/idUSLDE60405S20100105
Lookas like EADS want to quit the A400M project to protect their civilian work. It seems that the military are holding them to their fisxed price contract and the associated penalties for delays and EADS don’t want to play anymore….
Interesting NON!!!!
Thanks for the heads up Jed, Just went and read the post on the ARES blog. Bad news I would say, we should have told them honour the contract or we are gone as we simply don’t have any money to pay for higher unit costs. If we are definitely set to get only get 14-19 aircraft then yes I would argue dumping it would be the better option than paying the same amount of cash for less aircraft. The first option I think should then be more C-17’s since that line is due to close and has much less similarity with the A400M or C-130J in regards to payload and role. The point is the A400M is a C-130 replacement for the RAF not a C-17 replacement so buying additional C-17’s would not duplicate similar capabilities. Odd but the idea is that it would still leave open the option to buy the A400M at a later date. A larger C-17 fleet would be able to fulfil the strategic airlift role to better effect while freeing up the C-130J’s for tactical work. A few more C-130J’s could be ordered but the delivery lead time is not much shorter than that of the A400M, I would still favour the majority of funds be directed towards a C-17 purchase.
The idea should work in the near to medium term as we look set to be committed to operations in Afghanistan for many years to come so airlift will be needed to maintain our presence. When withdrawal comes larger transports should also help speed withdrawal of forces which would be beneficial for PR.
Well that was me with my A400M sceptic hat firmly on so on the other hand we could just accept a higher price and slash our aircraft orders. In the much longer term we would still benefit from its (supposed) much lower maintenance and running costs as well as commonalty with allies. There would also be no risk to industrial work share (debatable) safeguarding some Jobs and therefore votes (debatable again).
The ARES blog reports that the UK has told EADS that as our coffers are completely empty, there will be no more development money from the UK and that depending on the final ‘list’ price the RAF would get between 14 and 19 aircraft (down from 25).
In other words introduce a whole new type, with its attendant training and logistics overheads for 1 squadron.
I think we would be better off bolstering the C130J force and buying some more C17′s.
The A400M flies congratulations Airbus but in my opinion it’s not that big an occasion in reality as the road ahead is long and challenging. If the Wright Brothers could get an aircraft made from cloth, wood and string into the air then it’s only right that Airbus should manage to get the A400M flying. This first test flight was relatively straightforward and the aircraft has yet to be inspected to see how it handled the stresses of its first flight. The main challenge is fulfilling the specifications and capabilities that Airbus promised its customers which some argue and for very good reason it will fail to meet. The program is already massively behind schedule and over budget by quite some amount so Airbus still has everything to prove and must be careful to ensure the testing proceeds close to schedule. The main purpose I think this test flight has accomplished is hopefully placating those who doubted the program and could possibly help save the program from cancellation as funds are extremely tight.
The chances of the United States purchasing the aircraft are very slim although they do exist as pointed out by the author. However the USAF will be at a crossroads soon on what to replace the bulk of the C-130 fleet with as currently they are being slowly replaced with J model aircraft. An option would be a switch to the A400M after it has proven itself in a few years time although it seems more likely the US will want to stick with the C-130J for commonality and political considerations. The A400M could be in with a chance depending on which team if anyone actually wins the massive tanker contract if Boeing wins the Northrop/EADS supporters could push for the A400M to be considered. The ideal being to appease the Northrop/EADS partnership and supporters so that they at least get something while the US military also gets something that it could find useful. EADS is already making inroads in the US market and this would be an area where they could compete considering the niche the aircraft has. I can hear the chorus of the Boeing and protectionist fan boys moaning about this suggestion already (I don’t know if many of them read this blog but I may as well add it) all I will say is that it is not as barmy as you may think.