Close to $1.5 bln has been wiped off the value of Airbus after the weekend crash of an A400M military plane in Spain which left four crew members dead. Katie Gregory looks at the impact the crash could have on a project already marred by production delays.
ATTN CLIENTS - RESENT WITH NEW AIRBUS COMMENT Billions of government money, poured into a "more reliable" troop and cargo carrier... But now several defence forces have grounded their fleet of Airbus A400M planes. This crash in Spain over the weekend... left four crew dead... governments nervous... and shares in Airbus - turbulent. Falls - wiping around $1.5bln off the company. Alastair McCaig is from IG. (SOUNDBITE) (English) IG INDEX, MARKET ANALYST, ALASTAIR McCAIG, SAYING; "It will undoubtedly have a negative effect on the share price for a brief period of time but the fact that they're getting to a situation where they can iron it out before full production levels are hit is arguabley a benefit here." The development of 174 - A400Ms, has cost €20bln and it's Europe's largest joint defence contract, involving seven countries. At one point - it looked like the project may be scrapped altogether with delays in production, financial issues and technical problems. Howard Wheeldon is a defence and aerospace analyst. (SOUNDBITE) (English) INDEPENDENT DEFENCE AND AEROSPACE ANALYST, HOWARD WHEELDON, SAYING: "Well there's no denial that its nearly four years behind schedule, it's €6bln euros over budget that's a lot for any program but all aircraft programs ahve a problem particularly military ones where the end customer base are governments." This plane was being delivered to Turkey, when it crashed in Seville. Spain's Prime Minister is now urging a transparent investigation in a bid to restore confidence in the design. (SOUNDBITE) (Spanish) SPANISH PRIME MINISTER, MARIANO RAJOY, SAYING: "For Spain and for the European Union, it is very important to clarify what has happened here and to tell the truth. It's very important to say whether this was a circumstantial accident or whether it's been caused by a mistake." With the UK, Germany, Malaysia and Turkey refusing to fly their aircraft pending the outcome, Airbus will be hoping this isn't the final blow to an already plagued project. It's CEO has reaffirmed it's committment to the plane, saying the company will overcome this tragedy.