Transporter takes off

SEVILLE, Spain – The A400M military transport plane that has been causing Airbus and European defense ministers budgetary and logistical headaches finally took to the skies for its maiden flight on Friday.

But even as the hulking gray airlifter took off from the Spanish city of Seville, defense officials were meeting on the sidelines of the event to decide how to continue with the much delayed and over budget project.

Louis Gallois, head of Airbus parent EADS, said he found the takeoff “more moving than I expected. It’s enormous. We’ve been waiting a long time.”

He disappeared into the VIP tent – where journalists are not allowed – when asked about cost overruns.

The A400M program was launched six years ago with an order for 180 planes from seven governments – Belgium, Britain, France, Germany, Luxembourg, Spain and Turkey. The project is running at least three years late.

The original price was just under $30 billion, but a preliminary report by auditors PricewaterhouseCoopers said EADS might need an extra $7 billion – inflating the final bill by about 25 percent, a person familiar with the talks said.

Airbus CEO Tom Enders declined to talk about the A400M’s funding gap, saying “I am not talking about any sums of money today, we are celebrating the first flight.”

Friday’s flight tested basic functions such as the landing gear and the flaps. It marks the beginning of a three-year flight test program.

EADS has asked governments to renegotiate the initial contract, which was agreed along the lines of Airbus’ standard fixed price commercial contracts, rather than a risk-sharing military deal.

Enders has slammed the contract agreed to by his predecessor, which saddles the European planemaker with most of the costs of delays.

But asking governments to pay more has become difficult at a time when countries’ budgets have ballooned as they fight off the worst of the economic crisis.

As well as raising the price, officials could agree to cut the number of planes on order, reduce the specifications, or spread increased payments out over time.

Officials meeting in Seville will try to overcome a deadlock between countries such as France and Britain, whose militaries need the aircraft urgently, and other countries, such as Germany, that have budget concerns.

The A400M is designed to replace Lockheed Martin Corp.’s aging C-130 Hercules cargo aircraft used by the U.S. Air Force as well as the retired C-160 Transall transport aircraft developed by a French and German consortium.