Airbus shares fall by as much as 4% during the day after A400M crash

As a consequence of the crash of an Airbus A400M military aircraft at the weekend, shares in Airbus, which had risen steadily in value during April, fell by over 4.5% at one point on May 11th, though BY 5pm (GMT+1) they were trading down 1.8%. The A400M is a joint international project completed between seven European NATO nations – Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey, while at a cost of €20bn ($22bn) it is also the largest European military project. However to date only 12 of the ordered 174 planes, priced at €152m (US$167m) have been delivered, and the project has been beleaguered with engine problems relating to the West turboprop engines which have generate billions of euros in cost overruns and forced a bailout by the seven launch nations in 2010. In February, Airbus took €551m in charges for the latest A400M delays, bringing the total company charges over its lifetime to more than €4.75bn (US$5.3bn). “Airbus can ill afford more delays,” Hamburg stockbroker Berenberg have said in a note. “Longer-term, this latest development will almost certainly hamper the ability to sell A400M in the export markets, the only way this program will ever make any money.”
The crashed aircraft was due to be delivered to Turkey and was on its maiden test flight when it plowed into a field one mile (1.6 km) north of Seville’s San Pablo airport. Four of the six-man test crew were killed, while two remain seriously ill, but in a stable condition in hospital. Early unconfirmed reports indicate the plane suffered engine problems shortly after take-off, while it is believed that in making an emergency landing, it struck overhead power cables. The plane’s two black boxes have since been recovered. Other than the French, those who have taken delivery of the planes – France has six, Britain and Turkey have two each and Malaysia and Germany each have one, have decided to ground them until further notice, while France has indicated it will limit their use to strictly essential requirements.