The awesome cost of modern aircraft

[AVIATOR]

Costs, Delays Scupper Airbus A400M Sale To S.Africa
November 5, 2009

USD$ 520,000,000,000 for eight aircraft? Give me a break! Aviator

South Africa has cancelled a USD$5.2 billion contract to buy eight Airbus A400M military transport aircraft due to rising costs and delivery delays, cabinet spokesman Themba Maseko said on Thursday.

The move is a setback for the European planemaker, which appeared caught off guard by the decision, and could hand business to US rivals eager to pounce on delays and uncertainty surrounding Europe's largest defence project.

The cancellation comes at a time when EADS is in the final stages of negotiating a rescue package for the rest of the EUR20 billion euro A400M project with a core group of European buyers, some of whom have also threatened to trim or cancel orders.

Lockheed Martin, producer of the veteran C-130 airlifter, has predicted extra sales due to A400M delays, which have mainly been blamed on engine software problems.

Launched after almost two decades of debate over European requirements in 2003, the A400M is designed to drop troops and heavy equipment in combat zones or disaster areas.

Britain, France, Germany, Belgium, Luxembourg and Turkey ordered 180 planes in Europe's largest single arms procurement deal. Export sales to South Africa and Malaysia brought the total order tally to 192 but Chile cancelled an order.

South Africa's decision does not affect the main EUR20 billion European contract which looms large over EADS finances, but the company is already relying on exports to make the plane break even after taking EUR2.3 billion in provisions.

"The termination of the contract is due to extensive cost escalation and the supplier's failure to deliver the aircraft within the stipulated time frame.

Maseko said the cost of the South African order would have been USD$5.22 billion. He said no penalty fee was expected as the contract made provision for cancellation.

Airbus plans to carry out the maiden flight of the A400M by year end, two years behind schedule.

[Webmaster]

$5.2 billion = 520,000,000,000 ?? In what world are you living? 

[RecceJet]

Considering this figure would include training and maintenance, I don't think that USD$650M is overly expensive for a large and modern airframe like that. Sixty-five Billion dollars per plane is different though!

[AVIATOR]

$5.2 billion = 520,000,000,000 ?? In what world are you living? 

Yeah OK so what's a couple of decimal points between friends?
$5.2,000,000,000

[Webmaster]

Aviator are you awed by the general high cost of modern aircraft, or this case in particular?

Considering this figure would include training and maintenance, I don't think that USD$650M is overly expensive for a large and modern airframe like that. Sixty-five Billion dollars per plane is different though!

Indeed, full life-time maintenance included, I mean this number should not be compared to most single-contract prices we see. There's a lot of talk about this on the web, people fail to understand that it's not just the aircraft cost. This package seemed to have been almost 'all-inclusive'. The South African need to lease commercial cargo planes until its delivery may also have been included. But it seems there was a lot of confusion over the correct number and some mix ups about what is actually contract price and what is cost.

But yeah the plane itself increased 25% in cost I read, which is not uncommon, but still a lot. It's expensive and has problems, sure, but it's in the C-17 class. The SAAF need a Hercules replacement, but really can't afford to go bigger than that. They are now looking at the C-130J, but not eight, just five. This is a budget-driven decision, I don't think it's fair to judge the A400M based on it. I was surprised when they signed up for it, and have been kinda expecting this move on their part.

Too bad, it would have been great for humanitarian/peacekeeping missions across Africa.

[AVIATOR]

There is a big difference in peacetime and war time when we talk about accepting costings.
These planes after all are war planes and the thought of the cost having things like this shot down is staggering. I mean back in WW2 we'd be losing Dakotas over the drop zone and accept it but  $650 million each sound like that'd be kept out of harm's way in a shooting war today.

[shawn a]

Seems like no one expects to have a war with a "peer state" these days. That's where A-400s could get shot down in large quantities. (once the air dominance issue gets settled)

[RecceJet]

Aviator is right about there being a big difference between peacetime and war. In peacetime a country would use transports like the A400 to move humanitarian aide to disaster-affected areas of the world. Normally those areas are not hostile to receiving help. In a time of war, however, the same transports are a key asset in providing logistics, although you'd expect immediate threats to be removed by then. It won't necessarily be a show-stopper to have high costs for buying transports then because they play such an important enabling role.

However with the comparison to Dakotas, they were very simple designs compared to what is flying today (other than the Dakotas that are still flying today!). The latest aircraft can almost fly themselves, communicate and obtain loads of information and navigate accurately and efficiently. Not to mention range and payload increases! That, added to the modern wage that the western workforce is entitled to and the high amount of maintenance that complex components require all add up.