Germany to fine Airbus over late A400M order

Posted on 15 Dec 2015 by Michael Cruickshank

The German government is reportedly planning to fine Airbus millions of Euros for the late delivery of military aircraft.

According to information disclosed by Reuters, Germany will fine the European aircraft manufacturer a total of €13m ($14m).

Airbus had been contracted to supply the A400M military transport aircraft to the German Air Force, however has failed to deliver the aircraft on time.

The fine itself is related to the cost of two planes which were expected to be delivered by the end of the year.

All up, the German Air Force plans to purchase 53 of these new aircraft, however, so far it has only received two functioning planes, one of which is now deployed in a support role in the fight against ISIS.

While one more aircraft may be delivered before the end of the year, this is substantially less than the five which were expected.

In May this year, it was reported that the German government was seeking around €300m ($330m) in compensation for the late delivery of these aircraft, a price which its Defence Ministry estimated would cover the costs of extending the lifetime of pre-existing Transall aircraft.

With this larger figure in mind, should the A400M deliveries continue at this slow a pace, future fines levied against Airbus could greatly exceed €13m ($14m).

Neither Airbus nor the German government has so-far officially commented on any potential fines.

It is also unclear so far whether other countries which have ordered the A400M will also pursue similar measures to compensate for delays in their own orders.

Fraught relationship between Germany and Airbus

The delays within the Airbus A400M program are just one of several major points of contention between the company and the Germany government.

Earlier in the year Airbus threatened to take legal action against Germany following revelations that country’s spy agency, the BND, had spied on the company and shared this information with their American counterparts.

Then in October, Germany halted deliveries of the Eurofighter Typhoon, also manufactured by Airbus, over reports of a ‘technical defect’ despite the company claiming it would not affect their aircraft’s performance.

All of these incidents show that despite Airbus being an EU-based manufacturer, Germany does not afford it any special treatment, especially in the area of politically-difficult military procurement.