France, UK may share military planes to reduce costs

The defence ministers of France and the UK said they’ll consider pooling equipment such as Airbus SAS A400M transport planes to cut costs, though they ruled out sharing aircraft carriers.

“Tankers, A400s, naval units, but just to be clear not aircraft carriers, are areas where we can work toward pooling,” French Defence Minister Herve Morin said at a joint news conference in Paris today after a meeting with his British counterpart, Liam Fox.

France, Britain, Germany and four other states agreed on a sweetened contract in March for the A400M, pledging to pay 25 billion euros ($32 billion) instead of 20 billion euros. Since then, both Britain and Germany have announced military spending reviews. Most European governments are grappling with deficit crises and reducing spending in areas that include defence. Britain’s Daily Telegraph newspaper reported earlier this week sharing aircraft carriers was on the agenda for the talks.

“I think it is unrealistic to share an aircraft carrier, but in other areas like tactical lift we can see what we can do,” Fox said. “This is about mutual interests. Our two natural partners are the US and France. I can’t deny that there is an element of urgency added by budget concerns.”

Reduced order
Airbus negotiated for a year to get the seven ordering states to commit additional funding for the A400M. The original accord called for delivery of 180 units at a fixed price. Airbus parent company European Aeronautic Defence & Space Co agreed in March that the nations could cut the figure by 10 to 170, deciding among themselves who would reduce their orders.

Even so, Airbus may have to wait months before governments reach a final agreement on increasing the price by 25 per cent, a French government official said yesterday.

Germany is the biggest customer for the plane, with 60 on order, followed by France with 50, and the UK with 25. Spain, Turkey, Belgium and Luxembourg have also signed on as customers.

Fox said a decision on whether the UK would go ahead with orders for two new carriers would come in October, when spending and defence reviews have been completed. Morin said he plans to travel to London late that month to discuss concrete projects.

Britain’s navy has signed contracts for the two carriers, the HMS Queen Elizabeth and HMS Prince of Wales, to be built by a group including BAE Systems Plc, Babcock International Group Plc and France’s Thales SA at a cost of 4.9 billion pounds ($7.4 billion).

The French government has delayed until next year a decision on whether to build a sister ship for the Charles de Gaulle, the nuclear powered 42,000-ton carrier that entered service in 2001.