Multimedia, Politics

Airbus loses 8 orders, SA loses R40 billion millstone (and peacekeeping ability)

Airbus loses 8 orders, SA loses R40 billion millstone (and peacekeeping ability)

As expected, Cabinet has agreed to cancel an order with Airbus for military transport planes. The government seems to think it'll get a full refund, and given Airbus' recent bullish forecasts, it is probably right.

The regular post-Cabinet meeting briefing on Thursday had just one highlight: the official decision to cancel an order for 8 Airbus A400 military transport planes. Those would have cost somewhere well north of R40 billion (according to the SA government) and somewhere far south of that mark, according to Airbus.

The cancellation has been fully expected since that R40 billion number emerged in mid-October, but what would have been surprising back then is the apparent Airbus attitude to the R2.9 billion deposit already put down. Cabinet says the money will be refunded, in full, with no deductions, reductions or penalties levied.

What has changed in the interim is Airbus’ forecast for market conditions. Airbus this week said it would deliver at least as many planes in both 2009 and 2010 as it did last year (when it handed over 483 aircraft) – despite the global recession.

The return of the deposit, and the budgetary relief of not having to make ongoing payments, will be a considerable relief to the Treasury. But the cancellation does put a dent in the Mbeki-era vision of a rapid-reaction African peacekeeping force. The A400s are made to carry helicopters and armour over medium distances. Without this new fleet, the SA National Defence Force does not have the capability to deploy such equipment quickly. If infantry units are rapidly deployed (transporting people is relatively easy), they will have to rely on local hardware for point-to-point transport and armour support. In areas where there is actual fighting, that will definitely mean more troops coming back in caskets.

But hey, at least we’ve got some cool new submarines and frigates, so we can police our fishing waters effectively.

By Phillip de Wet

Read more: Reuters, Bloomberg

WATCH: A400M launch


Please peer review 3 community comments before your comment can be posted


This article is free to read.

Sign up for free or sign in to continue reading.

Unlike our competitors, we don’t force you to pay to read the news but we do need your email address to make your experience better.

Nearly there! Create a password to finish signing up with us:

Please enter your password or get a sign in link if you’ve forgotten

Open Sesame! Thanks for signing up.

MavericKids vol 3

How can a child learn to read if they don't have a book?

81% of South African children aged 10 can't read for meaning. You can help by pre-ordering a copy of MavericKids.

For every copy sold we will donate a copy to Gift of The Givers for children in need of reading support.

A South African Hero: You

There’s a 99.8% chance that this isn’t for you. Only 0.2% of our readers have responded to this call for action.

Those 0.2% of our readers are our hidden heroes, who are fuelling our work and impacting the lives of every South African in doing so. They’re the people who contribute to keep Daily Maverick free for all, including you.

The equation is quite simple: the more members we have, the more reporting and investigations we can do, and the greater the impact on the country.

Be part of that 0.2%. Be a Maverick. Be a Maverick Insider.

Support Daily Maverick→
Payment options