EADS A400M programme faces 6-12 months delay, damages of $2 billion

Paris: Shares in Airbus parent EADS plunged after the company announced more bad news on Monday, warning that a six-month delay in the delivery of its A400M military transport aircraft would not only cost as much as $2.03 billion, but could even be further delayed by another 12 months.

A revised guidance for the year ahead is expected from the company on Thursday, when third-quarter results are released. Previously, EADS had projected earnings before interest and taxes at around 400 million euros ($579.2 million) this year, which it has now junked.

Meanwhile, in a statement EADS warned once again of "a risk of a further slippage of up to half a year."

Shares dipped 3.8 per cent, to close at 22.01 euros ($31.87) in Paris, as investors got reminded of recent troubles with the superjumbo A380, which was finally delivered last month to Singapore Airlines, two years behind schedule.

EADS first announced a six-month delay to the A400M on Oct. 17, citing slow progress in engine development. The A400M programme was launched in 2003, with 180 jets ordered by seven NATO nations. The aircraft also won orders from South Africa and Malaysia, bringing the total to 192.

The military transport was scheduled to enter service in 2009.

The Airbus A400M is a multi-role military aircraft, which can also be used as an aerial refuelling tanker. It is considered primarily to be a replacement for Lockheed Martin Corp.'s aging C-130 Hercules cargo aircraft used by the US and other air forces around the world.

A European consortium, including Rolls Royce Plc of Britain, Safran SA of France, MTU Aero Engines of Germany and Industria de Turbo Propulsores SA of Spain, is making the engine.