The German government is prepared to offer up to €1.2 billion in cash and loan guarantees to help Airbus pay for cost overruns for the A400M military transport plane, according to a person involved in the negotiations.
The offer was part of a package presented to European Aeronautic Defense & Space, the parent company of Airbus, this week by the seven governments participating in the much-delayed project. Germany, which has ordered the most planes, is expected to have to cough up the most to cover some €5.2 billion, or $7.1 billion, in extra costs.
The other participating countries in the A400M — Belgium, Britain, France, Luxembourg, Spain and Turkey — have also put offers on the table. Even so, the person involved in the talks said there was still “a hole of €400 million to be filled.”
The person spoke on condition of anonymity because negotiations had not been concluded.
Berlin’s contribution will be divided into two parts, half in cash and the rest in loan guarantees, the person said, adding: “We are still waiting for an answer to our offer.”
Depending on the response, Germany could decide to reduce its initial order, he said.
Germany, Belgium, Britain, France, Luxembourg, Spain and Turkey, ordered 180 A400Ms in 2003 for €20 billion, with one-third of the planes going to Germany.
The person said that EADS want to close the issue as soon as possible for accounting reasons.
EADS is under pressure to clarify what its share of the overruns will be soon so it can book them in its 2009 financial results, rather than carry them over into 2010. EADS’s 2009 accounts are scheduled to be published March 9, and have to be audited first by an outside firm.An EADS spokesman, Alexander Reinhardt, said the company had received the offers Monday night and was studying them, but provided no details. “We will answer it in due time,” he said.