Senate Considers the Report of the Oversight Committee of the A400M Military Transport Aircraft Program
(Source: French Senate Foreign Affairs and Defence Committee; issued July 5, 2012)
(Issued in French only; unofficial translation © by defense-aerospace.com)
In addition to recurring engine problems, the French Senate is concerned by the A400M’s in-service support, and has called for partner countries to jointly manage spares and MRO. (AM photo)
Meeting on Wednesday July 4, 2012, under the chairmanship of Mr. Jean-Louis Carrere, Chairman of the Committee on Foreign Affairs, Defence and Armed Forces of the Senate, members of the commission heard the report of Senators Bertrand Auban, Jacques Gautier and Daniel Reiner on the oversight of the A400M program.

The A400M program has had very difficult beginnings. Lessons must always be drawn for future European cooperation. In particular, the principle of fair return must be permanently abandoned and freedom should be given to industrial contractors to choose their suppliers based on their skills, not their nationality.

Today the program is progressing and should be able to respect the new delivery schedule. The aircraft should meet contractual requirements. The A400M will be the best military transport aircraft in the world because it is the only of its size with both strategic and tactical capabilities. We must welcome the nations who have, in a difficult budgetary period, demonstrated a common will and the necessary efforts to bring this program to completion. Any further reduction in the number of aircraft ordered for budgetary reasons would undermine these efforts.

The legitimate satisfaction that can be drawn from the impending delivery of aircraft contrasts with the concerns that one may have regarding the establishment of joint support.

Indeed, two thirds of the savings expected from a European program of this magnitude come from the ability of states to pool support operations and stocks of spare parts. That does not seem to be the current direction the program is taking.

We cannot accept the fact that nations come separately to the negotiating table. It is imperative that nations complete this program as they began: together and jointly.

This concerted action is all the more necessary that the establishment of a European military transport fleet under joint command between Germany, the Netherlands, Belgium and France (EATC) has profoundly modified the landscape, and argues in favour of the harmonization of employment rules and of military certification regulations.

Beyond the issues of aviation safety, that are the primary objective of airworthiness regulations, aircraft certification is an issue of considerable significance in industrial competition. The existence of a European credible label not only in civil aerospace, but also in the military aviation sphere, is a critical element of our ability to export our products. That is why senators are in favor of the eventual emergence of a single European military airworthiness authority.

This report was adopted unanimously by members present of the Committee on Foreign Affairs, Defence and Armed Forces of the Senate.


Click here for the full report (86 PDF pages, in French only) on the French Senate website.



EDITOR’S NOTE: The above report includes some interesting details about the renegotiated A400M contract of April 2011, which are summarized below:

- The program’s cost overrun is 6.2 billion euros, of which EADS will pay 4.2 billion euros. It took a charge of 2.4 billion in its 2009 accounts.
- The balance, or 2 billion euros before VAT (at January 2009 economic conditions), will be paid by the partner nations proportionally to the number of aircraft ordered (export sales excluded). This is equivalent to an increase of about 10% of the aircraft’s unit price.
- Partner nations also agreed not to levy the financial penalties to which they were contractually entitled, amounting to 1.2 billion euros, and to provide to AMSL (the legal entity that is the program’s prime contractor) additional financing of 1.5 billion euros in the form of a loan to be reimbursed thanks to a levy on export sales: the Export Levy Facility (ELF). The manufacturer’s goal is to sell 280 to 300 A400Ms on the export market over the next 30 years.
- For France, these contractual amendments translate into 556 million euros in additional costs, with an additional 417 million euros for its contribution to the ELF.
- AMSL pushed back the delivery schedule by three and a half years for the initial aircraft, and by four years on average. Furthermore, some countries, like France and Spain, have decided to spread out their deliveries to help them pay the additional costs.
- Current plans call for the first four aircraft to be delivered in 2013: three for France and one for Turkey. Contractually the first production aircraft earmarked for France (MSN7, currently being assembled in Seville) should be delivered in late March 2013.)


(ends)



French Senate Report on the A400M Program: Conclusions
(Source: French Senate Foreign Affairs and Defence Committee; issued July 5, 2012)
(Issued in French only; unofficial translation © by defense-aerospace.com)
The A400M program has had very difficult beginnings. Appropriate lessons must be drawn for the future of European cooperation.

In particular, the principle of “juste retour” (fair return) should be permanently abandoned, and freedom given to industrial contractors to choose subcontractors based on their skills and not their nationality. This is not wishful thinking, but a vital principle which, if not implemented, will prevent European states from ever reaping the full benefits of their cooperation. Such cooperation is now essential because the road to national, solitary acquisition is now firmly closed.

Today, the program is back on track. It should conform to the new delivery schedule, and the aircraft should satisfy contractual requirements. The A400M will be the best military transport aircraft in the world because it is the only of its size with both strategic and tactical capabilities.

Entering this new, more satisfying phase of the program was made possible by the efforts of the manufacturers, their subcontractors and their suppliers, firms both large and small, and the major European engine manufacturers, who have together reacted in an exceptionally creditable manner to the situation that prevailed in 2009.

We must also salute the nations which, in a period of budgetary constraints, have demonstrated their common will, and made the necessary efforts, to see this program through to its completion. Any further reduction in the number of aircraft ordered would, however, undermine these efforts.

France was among the nations that have never changed the size of their aircraft offtake, which demonstrates that its initial fleet estimate was accurate. France assumed the role of de facto program leader which, on the basis of the number of aircraft procured, should have normally have been taken by Germany, also because it will be the first to use the aircraft, and thus to set the rhythm in terms of operational and technical tempo.

However, the legitimate satisfaction that can be derived from the imminent delivery of the aircraft contrasts starkly with the concerns regarding the establishment of joint support mechanisms.

These concerns do not arise from the fact that the original idea of awarding a comprehensive support contract covering both airframe and engines has been dropped. Such a contract would have greatly eased the lives of customer states, and would have guaranteed common evolution in future. But it also would have generated significant additional costs. Furthermore, having separate contracts, one for the airframe and one for the engine, is the rule in both civil and military aviation.

Having separate support contracts for the A400M is, however, a complex issue to manage effectively as partner nations did not sign the development contract directly with the engine manufacturer. They will thus have to ensure that existing arrangements for engine maintenance and support are not weakened by the separation of support contracts.

Furthermore, it is essential that nations reach this point jointly, and not one by one, and that they avoid taking account only of their own schedules or their current interests. We cannot, for example, accept that no European common stock of spare parts is being established.

For instance, two thirds of the savings expected from a European program of this magnitude come from the ability of nations to establish joint support arrangements and a common and joint inventory of spares parts.

Nations must promptly make further efforts to remedy the situation. This will require diplomatic action at the highest level. It will also entail the pooling of national centers of excellence. From this point of view, France, with its AIA aviation workshops, has assets to contribute. Other nations should play up their own.

This concerted action is all the more necessary that the implementation of the European Air Transport Command (EATC) has reshuffled the cards, and will encourage a push for the harmonization of operating procedures and regulations.

An “à la carte” Europe could be a useful approach for advancing these issues, but its limitations are quickly reached.

Is it rational, for instance, for France to pool its A400M support with the UK, which is not part of the EATC, while sharing the operational control of these same aircraft with the other founding partners of EATC? Simple reasoning should convince Europeans to complete this program the same way they began it: together.

Finally, the time seems ripe to give new impetus to the harmonization of European military aviation safety, in the same way as has been done in the civilian sphere, and seriously consider the ways and means of establishing a European military airworthiness authority, which could save time and money for all participating nations. This would constitute an international standard, and prove an exceptional asset for Europe.

-ends-




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