The parent company of Airbus (the European Aeronautic, Defense and Space company), has been working on developing the first military transport plane to challenge the American C 130, the A400M. However, a number of different financial challenges have been hindering the development of the plane; as cost over runs and the production schedule have been the largest factors. The latest twist, in this recent saga, occurred when EADS asked for an additional $4.4 billion euros in funding from the different governments. In response to this offer, funding of $3.5 billion euros was provided; this was $900 million euros short of what was requested. As a result, another inevitable delay has occurred in a long awaited plane that was supposed to be in production.
What this shows; is that the A400M has a long way to go until it is viable competitor against the C 130. As this issue, will only continue to add to the delays and is affecting the overall earning projections for the company. While this issue will more than likely be sorted out; the reality is that Airbus is facing similar challenges that they had when they developed the A380. While, the plan did eventually become a competitor to Boeing; the overall costs and delays involved is what hurt the company. The same situation seems to be occurring once again, as the company is only continuing to face challenges in producing of: Europe's the first viable military transport plane.
The views expressed are the subjective opinion of the article's author and not of FinancialAdvisory.com
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