The partner nations of the Airbus A400M military transport plane will reduce their orders by up to 10 planes in exchange for increased funding for the delayed and financially troubled project.

Britain said this week it would cut its A400M orders by three to a total of 22 planes. While France is sticking to its 50 orders, Germany is mulling to trim its contract for 60 planes, German newspapers reported. Other partner governments include Belgium, Luxembourg, Spain and Turkey.

European defense officials said the new contract could be signed as early as June.

The cuts are apparently part of a March 7 deal between Airbus' parent European Aeronautic Defense and Space Company and the partner nations, which have agreed to pay an additional $2.7 billion for the planes, a pass on penalties on current delays and a new delivery schedule.

The bailout plan, worth $4.8 billion in total, followed threats from the European aerospace company to pull the plug on the project if an agreement to refinance construction of the A400M military transport plane wasn't swiftly reached.

The project was agreed to in 2003 with Airbus ordered to construct 180 A400Ms at a fixed price of $29 billion. Technical delays, ballooning costs and political blunders caused delays in project, however, with the plane's maiden voyage taking place only last December in Seville, Spain.

The project now is expected to cost around 50 percent more than original estimates and is three to four years behind schedule.

The partner countries desperately need a new freighter plane: Britain is eager to modernize its fleet of Hercules and C-17 carriers, worn by the mission in Afghanistan; and France and Germany want new transport planes to replace their 4-decade-old C-160 Transall machines, which are slow and inflexible.

Airbus claims the A400M can carry double the load of the hugely popular Lockheed C130 Hercules, also a four-engine turboprop, and is more fuel-efficient than the jet-powered Boeing C-17.

Meanwhile, officials in the partner nations harshly criticized the management failures linked to the program.

"There is clearly a problem of organization and industrial management," he said. "EADS and Airbus have drawn conclusions on organization but they have to work harder on their capacity to manage programs," Laurent Collet-Billon, the head of the French arms procurement office was quoted as saying by Defensenews.com. "I think EADS has to make a very big effort to improve its management culture."

earlier related report
US senators press Obama on Airbus-Boeing feud
Washington (AFP) March 31, 2010 - US senators urged President Barack Obama on Wednesday to protect US aerospace firms including Boeing from competition from Airbus, citing "illegal subsidies" to the European aircraft maker.

In a letter to Obama, the eight lawmakers notably called for action "without delay" on a lucrative US military contract for a new fleet of aerial refueling tankers that had sparked a bitter feud between the aerospace giants.

The senators pointed to a confidential World Trade Organization (WTO) ruling last week on a dispute over aid payments to rivals Airbus and Boeing, saying the decision found that Europe improperly aided its home-grown consortium.

"Having relied on illegal subsidies to buy market share in the commercial aerospace market, Airbus now seems intent on further using subsidized aircraft to significantly increase its presence in the US defense market. This is unacceptable," they wrote.

"We urge you to move forward on the Air Force tanker competition without delay," said the group, led by Democratic Senator Patty Murray and Republican Senator Sam Brownback.

The letter came after Obama promised visiting French President Nicolas Sarkozy that the bidding for the new fleet would be "free and fair."

Sarkozy said he trusted Obama, and that Airbus parent EADS would resubmit a bid, following a row over claims the United States was favoring Boeing for the contract.

Last week EADS asked the Pentagon to extend the May 10 deadline for bids by 90 days, and the US Defense Department indicated that it would welcome a new offer from the European aircraft maker.

EADS said this week it would decide in two to three weeks whether to compete for the the 35-billion-dollar (26-billion-euro) contract to supply 179 tanker planes.

The WTO last week issued a 1,000-page ruling Washington's complaint over EU aid payments to Airbus but a parallel report into a tit-for-tat Brussels complaint over Washington's aid for Boeing is not expected before June.

EADS and its US partner Northrop Grumman had dropped their bid for the contract early this month, saying that the Pentagon's requirements were skewed in favor of Boeing. The move opened the door for the US firm to win the deal.