UPDATE 1-France may cut A400M orders - arms official

Tue Mar 17, 2009 7:54am EDT

* May lease or buy alternative aircraft

* No comment on whether Boeing C17 is being considered

(Adds detail)

By Tim Hepher and Matthias Blamont

PARIS, March 17 (Reuters) - France may need to reduce its order for 50 A400M military transport planes from European aerospace group EADS EAD.PA because of development delays, the country's top defence procurement official said on Tuesday.

The A400M programme is running at least four years late, said Laurent Collet-Billon, recently appointed director general of French defence procurement and export agency DGA.

The DGA is looking at the possibility of leasing or buying alternative transport aircraft to meet the shortfall as it struggles to maintain a fleet of ageing transport aircraft in Afghanistan, he said.

"It is one of the alternatives which we have to examine. We have not yet finished examining the capacity gap and that could lead to a reduction in the target (of 50 aircraft)," he said.

He declined to comment on whether France would consider acquiring Boeing's (BA.N) C17 strategic jet-powered airlifter but said he was looking at an aircraft in that category which he declined to identify.

He ruled out buying Lockheed Martin's (LMT.N) C130 Hercules, which is smaller than the A400M.

Like Britain, France was studying bringing forward deliveries of combined troop carrying and refuelling aircraft to help meet the gap left by the A400M.

The A400M is a military airlifter being built by EADS's Airbus Military division on behalf of seven NATO nations who have together ordered 180 of the planes.

The manufacturer says it is running 3-4 years late amid a dispute with suppliers over engine problems and has asked for more time to finish the project as well as relief on billions of euros of potential delivery penalties.

"One shouldn't get fixated by this delay," French Defence Minister Herve Morin told Reuters on Tuesday. "What is certain is that we need this aircraft. We need to renew a part of our transport fleet that is very old." Morin also said Britain's transport fleet was ageing and needed overhauling.

NATO countries that initially ordered the plane agreed last week to call for a three-month moratorium to prevent individual nations walking away from the project. (Additional reporting by Crispian Balmer; Editing by Dan Lalor)