9-30-13 10:53 AM EDT | Email Article

By Matthew Curtin


The French air force Monday received the first of 50 new-generation military transport aircraft made by Airbus, a milestone for the manufacturer and the European governments backing the A400M whose development was dogged by engineering problems, cost overruns, and delays.

Airbus has commitments to deliver 170 A400Ms to France, Germany, Britain, Turkey and three other European countries. Airbus parent European Aeronautic, Defence & Co. has taken around 4 billion euros ($5.4 billion) in write-downs on the EUR20 billion program after spending five years trying to fix the engineering glitches.

The four-engine turbo-prop plane is entering service a decade after the project was launched. Airbus hopes it can turn the plane from a financial liability into a marketing asset by notching up new sales in Asia, the Middle East and Latin America, even as budget cuts in Europe have capped potential sales nearer home. Malaysia has four of the planes on order.

Company executives reckon that the next three decades will bring orders for up to 400 military cargo and troop transporters.

EADS Chief Executive Tom Enders acknowledged the A400M program had been no "walk in the park" but said Airbus would continue to work closely with governments to meet defense needs at a time of increasing budget constraints.

Mr. Enders was speaking at a ceremony at the A400M's final production site in Seville, Spain. French Defense Minister Jean-Yves Le Drian and his Spanish counterpart Pedro Morenes were among the dignitaries.

The A400M's start of active service comes as EADS is restructuring its defense activities, which make up around a fifth of sales. That's a far smaller proportion than defense sales at Boeing Co., Airbus's arch-rival in the commercial aerospace sector.


--Ana Garcia in Madrid contributed to this article


(END) Dow Jones Newswires

September 30, 2013 10:53 ET (14:53 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.
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