German taxpayers to bear unpaid Airbus loan to develop A380 superjumbo jet: report

Germany loaned Airbus €942 million in 2002 in connection with the A380’s development, of which only a third has been repaid. (AFP)
Updated 04 March 2019

German taxpayers to bear unpaid Airbus loan to develop A380 superjumbo jet: report

  • Airbus last month said it would scrap the A380, producing and delivering only 17 more by 2021
  • Emirates — the largest A380 customer — reduced its orders for the superjumbo after an engine dispute and a broader fleet review

FRANKFURT: German taxpayers could be left more than $680 million (€600 million) out of pocket in outstanding credit to Airbus for developing the A380 superjumbo, the Funke Mediengruppe will report on Monday citing an economy ministry statement, excerpts approved for release showed.
Berlin loaned Airbus €942 million in 2002 in connection with the A380’s development, of which only a third has been repaid, the media group cited the statement as saying.
The ministry issued the statement in reply to a parliamentary question from the opposition liberal party (FDP), it said.
Airbus last month said it would scrap the A380, producing and delivering only 17 more by 2021, because customers preferred smaller and nimbler jets.
This came after Emirates — the largest A380 customer — was forced to reduce its orders for the superjumbo after an engine dispute and a broader fleet review.
Repayments are due successively once planes are delivered, meaning the premature end of the production pipeline will leave some parts of the loan unpaid, the media group reported.
Deputy economy minister Ulrich Nussbaum was quoted as saying the handling of the loan issues was still being analyzed and would then be discussed with the company.


Saudi defense contractor to invest up to $16 million to further localize services

Updated 18 November 2019

Saudi defense contractor to invest up to $16 million to further localize services

DUBAI: Saudi-based defense contractor Middle East Propulsion Company (MEPC) plans to invest between $13 million and $16 million over the next two years to build test cells for aircraft engines and establish new production lines.
These expansion activities should complement the company’s objective to localize high-tech repairs and combine them in one roof for the Saudi defense ministry, which is a major customer, CEO Abdullah Al-Omari told Arab News.
Instead of sending aircraft engines and engines modules overseas for further servicing, thus take up more time before military assets return to actual service, localization not only cuts the turn-around period but also reduces Saudi government spending for the repairs.
“We have accomplished more than 1,600 engine and engine modules [since 2001, they] have been maintained totally in Saudi Arabia,” Al-Omari said at the sidelines of the Dubai Airshow. “The engines consume 45 percent of what you spend on aircraft.”
The company works on 150 to 160 engines and engine modules every year.
MEPC is the first specialized MRO (maintenance, repair and overhaul) company operating in the Middle East, according to its website. It has invested over $26 million during the previous two years for the localization of its MRO services.
“We used to send these parts to outside, it takes 6 months to 24 months sometimes … in case of the Apache engines, minimum turn around is 24 months,” Al-Omari said, but their localization efforts have greatly improved their capability by cutting the turn-around period to only 150 days.
The speed at which MEPC is able to repair engines and modules, boosts the readiness of Saudi military, Al-Omari added.
The company is in talks with major defense contractors, including Honeywell for the Abrams talks and GE T700 engines, for possible tie-ups to further improve their capability, he said.
“Currently there is a potential with the Kuwait army to provide them with similar services [being delivered to the Saudi defense ministry],” Al-Omari said, and expects that cooperation would start “within the next two years or so.”