Airbus talks with military plane clients 'constructive': Enders

Djallal MALTI

Madrid talks with representatives from seven countries buying Airbus's troubled A400M military plane were "constructive," the boss of Airbus, Tom Enders, told AFP Wednesday, as he seeks relief from penalties due to delivery delays.

"We're not communicating about meetings like that, but I can say it was a constructive meeting," Enders said on the sidelines of the aerospace giant's shareholders general assembly in Amsterdam.

He also voiced optimism over the Airbus A380 double-decker superjumbo, even though production is due to be halved next year amid falling demand, saying "customers love it".

The original contract for the military A400M between Airbus and its clients "puts heavy penalties on us for delivering aircraft late", he said.

"This is basically an area where we want to negotiate, or discuss, with the nations how we can mitigate that."

But he insisted the "discussions are not about Airbus demanding, like back in 2009, billions of additional contributions from the nations."

The A400M was commissioned jointly in 2003 by the governments of Germany, Belgium, France, Britain, Luxembourg, Spain and Turkey, but since a delayed launch in 2013 it has run into difficulty, with behind-schedule deliveries.

In February, Enders said the group would ask clients to refrain from imposing further penalties over the delivery delays as the firm's 2016 profits nosedived due to charges related to problems with the transport plane.

Enders refused to go into further detail on the discussions underway, but praised France's continued support for the programme.

The A400M's delivery has also been hit by a string of technical problems and different requests from the governments.

- Not giving up on A380 -

Turning to the doubledecker superjumbo, Enders insisted: "We haven't given up on the A380 because the trend which we saw clearly when we started the project is visible in every area, i.e. a larger aircraft, with larger capacity."

Airbus was "working on making the aircraft more attractive" and studies on how to add 80 more seats "obviously would boost the economics of the aircraft", he said.

However, Enders stressed: "If we should run out of backlog at some point of time, look, we are building aircraft for people who want them, for airlines who want them and who pay good money for it. We're not in the business of designing or building aircraft that nobody wants."

In July, Airbus said it would cut the production rate of its A380 to one a month from 2018 to reflect reduced demand. In 2015, the manufacturer handed over 27 planes, but next year aims to deliver just 12.

The group has seen a slowdown in demand for long-distance carriers due in part to falling fuel prices which have impacted on the renewal of ageing fleets, but also as a result of weakening demand from Gulf carriers which peaked in recent years.

Airbus ended the year with a backlog of 6,874 planes with a list price of $1 billion.

Enders said however he believed Airbus still has a number of years to find new customers for the A380, and to make the planes more attractive.

"While airlines are sceptical about it because their problem is they're not sure they can fill it, customers love it," he said.