The brinkmanship seems to be coming to a conclusion on the saga that is the A400 with the partner nations concluding talks on their negotiating position. They will now invite EADS to the table to conclude a way forward.
Whilst there remains differences between the partner nations they all recognise that common ground needs to be found and found fast.
The A400 has blown its budget by over €11 billion and is three years late, the delivery issue remains particularly acute for a number of partner nations as their existing transport aircraft fleets are being flogged to death in high intensity operations in Afghanistan and elsewhere. Costs of plugging the gap must be factored into the cost over runs. EADS has asked the partner nations for a 25% increase, about half of the total cost over run, EADS shouldering the rest.
The consequences of cancellation are dire both for the European aerospace industry and European defence collaboration, which would lead some to say that the A400 is an overly political project that shows the folly of greater European defence integration.
I think the A400 is safe but the partner nations, through OCCAR, must not let EADS off the hook too easily. It is likely that delivery time scales will be elongated, some compromise on initial operating capabilities and dispensing with contract penalties for late delivery will be accepted.
EADS may also contribute aircraft to meet the interim capability gap with a mix of Airbus and CASA aircraft.
Even if the full cost increase is accepted there must be a quid quo pro.