Spain may cancel remaining Airbus A400M orders -sources

By Belén Carreño, Inti Landauro and Tim Hepher

MADRID/PARIS, (Reuters) – Doubts are growing about Madrid’s remaining orders of the Airbus A400M Airlifter, European defense sources have said Monday. This raises the stakes for talks regarding the planemaker’s future investment in one its founding nations.

The A400M, Europe’s main defense project, is a key point of aerospace investment in Spain. Spain has already ordered 27 of these troop planes and is responsible of final assembly.

After months of uncertainty, European defense sources claimed Madrid was considering cancelling the 13 Spanish quota aircraft that were not yet delivered. This after the air force had indicated that it didn’t need the additional planes.

Airbus and the Spanish government declined to comment.

The A400M project was designed to increase the strategic autonomy seven European NATO countries that had previously relied upon U.S. airlift. However, it has experienced a number of delays and cost overruns.

As Airbus Chief Executive Guillaume Faury attended Centenary Celebrations of Construcciones aeronauticas (CASA), a European company that gave birth more than 50-years ago, fresh doubts were raised about Europe’s biggest defence project.

    Prime Minister Pedro Sanchez, Defence Minister Margarita Robles and King Felipe also attended Monday’s event in Getafe, outside Madrid, which included the opening of a space facility.

According to sources, any decision on the future A400M is likely to spark intense negotiations over alternatives defence orders and Airbus’s continued investment in Spain.

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Airbus and Spain are currently in talks over ways to mitigate any impact of a partial A400M cancellation. Sanchez’s office provided a breakdown of the benefits Spain had offered Airbus.

In a statement following a meeting between Sanchez and Faury on Monday, the prime minister’s office made no mention of the A400M but urged Airbus to increase its footprint in Spain – one of its core nations alongside France, Germany and Britain.

The two sides “addressed the need for the company to increase the industrial workload in Spain” The statement added that Madrid had also supported Airbus during the pandemic.

Airbus did not immediately comment on the meeting.

Janes, a defence publication, reported last year about Airbus waiting for Madrid’s backing of the SIRTAP tactical drone program. It was co-developed by Airbus Spain (and Colombia)

Last year, Spain ordered 20 Eurofighter combat planes more. This is a four-nation fighter program for which Airbus is the industrial partners in Germany and Spain.

Spain’s unemployment rate increased to 12.87% in quarter four of 2022, up from 12.67% just three months prior. This pushes the number of people without jobs above the 3,000,000 mark.

    In the southern Spanish region of Andalusia, where Airbus assembles the A400M, the rate was however higher at 19%.

(Reporting by Tim Hepher and Belen Carreno; Editing done by Alison Williams, John Stonestreet, Lisa Shumaker, and Alison Williams