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Monday, January 12, 2009

400M transport could hit $6 billion in cost overruns

Analysts concerned that problems are spiraling out of control for program

Concern is mounting that EADS's problems with the A400M military-transport program may spin out of control and result in billions of euros in additional charges after the company delayed the aircraft by another two years and declined to fix a date for its first flight.

Late Friday, European Aeronautic Defence & Space Co. said deliveries of the aircraft won't start until three years after the undated first flight.

The additional delay to the program, already more than a year late, could mean as much as $6 billion in total cost overruns, according to Nick Cunningham, analyst at Evolution Securities.

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