Publication: Issued: Date: 2009-02-27 Reporter:

Depth of A400M military transport aircraft crisis disclosed





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The travails of Europe’s A400M military transport aircraft programme, in which South Africa is a risk-sharing partner, are greater than previously believed. The extent of the problems has been revealed in a report released by the French Senate. On the other hand, the Senate report affirms that the A400M programme is essential for the European aerospace industry and must be preserved.

South Africa has ordered eight A400Ms, and the South African companies involved in the programme are Denel Saab Aerostructures (DSA), Aerosud (both risk-sharing partners), Grintek and Omniples, with Armscor providing engineering services.

The Senate report states that there are serious development problems with the aircraft’s navigation and low-level-flight systems, digital engine controls, horizontal tail surfaces, and with the definition of the wing design. Indeed, it seems that Airbus is proposing an interim standard A400M that would be incapable of undertaking the more sophisticated flight modes planned, until the issues with the avionics have been resolved.

Also, the empty weight of the aircraft has indeed, as had been claimed in the European press, increased by 12 t. As Airbus does not intend to reduce the A400M’s payload capacity of 37 t, this implies that the aircraft’s maximum landing weight will have to increase from 122 t to 134 t. This increased weight may reduce its top speed and is likely to reduce its unrefuelled range, while increasing the length of airstrip needed for taking off and landing.

In real terms, the cost of the A400M programme has increased by some 21% over the past ten years *1. According to the original €16-billion contract for the aircraft, signed in December 2001, the A400M was meant to make its first flight in 2006 and deliveries were to start in 2008. (This original contract was subsequently amended in 2003, increasing its value to €20-billion.) The aircraft has, however, still not made its first flight, which is now not expected until later this year – although it could even be delayed until next year.

The French Senate report states that production ramp-up will only happen in 2014, and that it could take until 2020 to eliminate the backlog caused by the various development delays.

The report spreads the blame for the debacle across both governments and industry.

Thus, governments rushed into a poorly structured programme, left oversight to a multinational European agency (known as Occar) which had neither the resources nor the authority to fill such a role, ignored industry recommendations that €500-million risk-reduction studies first be carried out, and established tight timescales that left no margin for error. Further, the governments almost guaranteed failure by demanding that the A400M programme involve the parallel development of a new airframe, a new engine, and new avionics. For its part, EADS, the parent company of Airbus, failed to grasp just how complicated the programme was.

However, because the programme is seen as crucial to the future of Europe’s aerospace industry, the report urges that the contract be renegotiated to save the programme. France has fifty A400Ms on order, while Germany has 60, Spain 27, the UK 25, Turkey 10, Belgium 7, Malaysia 4, and Luxembourg 1 – add South Africa’s 8 and the total comes to 192.

The South African companies involved in the A400M programme each have their own areas of responsibility, for the design and manufacture of specific structures and components for all A400Ms, not just those destined for this country.

Aerosud is mainly responsible for secondary structures. These are nose fuselage linings, cargo hold linings, and cockpit linings, but the company is also making the cockpit rigid bulkhead, the wing tips, and the nose fuselage galleys. The wing tips are quite important because they will contain elements of the aircraft’s defence aids subsystem.

DSA is responsible for the top shells for the centre fuselage section – these can be thought of as being equivalent to roof panels. The company is producing two top shells for each aircraft – one each in front of and behind the wing box, which joins the wing to the fuselage. In addition, it is making very large wing/fuselage fairings, manufactured mainly from composite materials but including aluminium parts. Each such fairing is 15 m long, 7 m wide, and nearly 3 m high. DSA is also contributing the ribs and spars for the tail fin, and centre wing box structural components.

Grintek is providing life-time monitoring systems for the aircraft, and Omniples is producing satellite communications antennas.

With acknowledgements to

*1       Okay, 21% base currency inflation plus 70% RoE escalation.

That equals 105% total escalation.

So where does the 175% price increase come from (R17 billion to R47 billion).

But the initial price estimate was actually R7,5 billion

So real price increase in some 525%

Something don't gel here.

It's probably that with all the technical and timescale problems with the A400M Loadmaster, that the current partners could pull out.

The way to keep them in is to radically increase the commissions paid to the local decision-makers.

None of the main partners have been adverse to paying extremely large local commissions to sell their inferior products.

But their shareholders want an increase in their share value, their directors want an increase in their share options and commissions and their managers want an increase in their profit share and commissions so they don't want the contract gross profit to reduce.

So they increase the contract price.

Just like in the Arms Deal.

If any one took the time to analyse the almost identical pattern of price escalation in the Arms deal once the prime contractors achieved the negotiating imperative of leg over, they would concur.

But I suppose my concerns will be put down to bitterness in having my IMS deselected from the corvette combat suite.