RPT-UPDATE 1-Britain says can't accept 3-4 year delay in A400M

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LONDON, Jan 12 (Reuters) - Britain cannot accept a three to four year delay in the delivery of Airbus A400M military transport planes, British Defence Secretary John Hutton said on Monday.

Hutton also confirmed that Britain, which has long sought to upgrade its ability to transport troops and equipment to conflict zones such as Afghanistan, is looking at acquiring more C-17 Globemaster cargo planes from Boeing BA.N.

Britain is one of the original seven nations to order the A400M airlifter, but Airbus parent EADS <EAD.PA) indicated last Friday that the A400M would not be ready before 2012 and called for a renegotiated contract with NATO nations.

“We cannot accept a three to four year delay in the delivery of these aircraft. It is going to impose unnecessary and unacceptable strain on our air assets and we, along with all of our partner nations, will have to consider very carefully indeed what the right response now to this problem is as we go forward,” Hutton told parliament.

The 20 billion euro ($27 billion) A400M project has been hit by delays in building its massive turbo-prop engines, sparking a public row with suppliers.

EADS has in turn been unable to meet its obligations to seven European NATO countries that ordered the plane in the largest single European arms purchase in 2003.

A member of parliament asked Hutton if Britain was considering acquiring more C-17s from Boeing because of recent militant attacks on the main land supply route through Pakistan for Western forces in Afghanistan.

“We have recently acquired additional C-17s, and we are looking at the possibility of acquiring more,” Hutton said.

Asked where this would leave the A400M programme, he said: “That’s a very, very good question.”

“The A400M programme is now likely to be subject to considerable delay, because of problems that EADS are having in producing the aircraft,” he said.

EADS said on Friday it wanted to “discuss the programme schedule, along with changes to other areas of the contract, including in particular certain technical characteristics”.

So far 192 A400Ms have been ordered from the original seven nations -- Germany, France, Britain, Spain, Belgium, Luxembourg and Turkey -- and export customers Malaysia and South Africa.

EADS last year effectively halted production and abandoned efforts to estimate the timing of the first flight, saying it could not set a schedule until engine makers gave more guarantees.

The engine consortium led by Rolls Royce RR.L and France's Safran SAF.PA hit back by blaming Airbus for the delays.

The delays have triggered disputes over whether there should be penalties paid to governments by EADS, which has so far taken some 1.7 billion euros of provisions to pay for the delays.

European defence industry officials said last month that Britain was in talks to speed up the delivery of mid-air refuelling tankers that can double as troop transporters, partly driven by delays to the A400M.

EADS shares were trading down more than 3 percent late in Monday trading. (Reporting by Adrian Croft, Frank Prenesti; editing by Will Waterman)


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