Airbus Replaces Military Aircraft Chief

Company Expects to Face ‘Financial Consequences’ Due to Problems With Its A400M Plane Program


By
Robert Wall
Updated Jan. 29, 2015 3:51 p.m. ET
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PARIS— Airbus Group NV on Thursday replaced the head of its military plane operations and said it would face “financial consequences” due to problems with the A400M military airlifter.

Domingo Ureña-Raso, who previously ran the A400M program, offered to resign from the role and will be succeeded by Fernando Alonso Fernández, the head of flight testing, the plane maker said in a statement.

Airbus Chief Executive Tom Enders said the company would owe governments buying the plane money to compensate them for delays. “I cannot say at this point what the financial consequences are,” he told reporters in Paris.

Mr. Alonso will take up his new post on March 1. Bernhard Gerwert, CEO of Airbus Defence and Space, will head the military plane operations on an interim basis.

A new position is being sought for Mr. Ureña-Raso within Airbus, the plane maker said.

Mr. Ureña-Raso, a Spaniard, became executive vice president of military aircraft at the Airbus Defence and Space unit a year ago. He began his career in 1982 as an engineer at Spain’s CASA, which is now part of Airbus. Mr. Alonso, also a Spaniard, joined the Airbus jetliner unit in 1982.

On Tuesday, Mr. Enders apologized for the performance of the A400M program. “Let me assure you that there will be management and organizational consequences to the program,” he said.

The A400M program has been hit by a series of production delays and technical defects.Airbus, the world’s second-largest plane maker, in November warned that earnings could be hit as a result. The project, which Airbus once considered abandoning because of spiraling costs, remains unprofitable.

The situation this time isn’t as critical as it was a few years ago, Mr. Enders said, calling it “significant” but not a “catastrophe.” The company won’t walk away from the project nor ask for more government money as it had in the past, Mr. Enders said.

Development of the A400M already ran billions of euros over cost and years behind schedule as Airbus and its partners struggled with birthing everything from the aircraft’s large turbo-propeller engines to some of its complex systems.

“I expect that the new team will rapidly address existing shortfalls in the most efficient way,” Mr. Gerwert said.

Airbus said the A400M program would be restructured with people focused on building the plane and fully developing its capabilities. Early models of the transport plane don’t have all the features customers have requested.

“We will do our utmost to overcome them so the customers receive the aircraft they need in the shortest time possible,” Mr. Gerwert said. Airbus added that the in-service planes operated by countries such as France and Turkey “are showing good performance, with the aircraft exceeding its specifications in its strategic, logistical role.”

Airbus has booked 174 orders for the A400M, with Malaysia, a group of six European countries and Turkey backing its development. Some countries have cut the size of their orders.

The company needs more deals to make money on the project, Airbus has said. Export campaigns for the plane are one of the group’s priorities this year, Airbus officials have said. The company believes the A400M could secure orders for several hundred aircraft.

Prospects to sell the plane could be aided by a Boeing Co. decision to cease building the larger C-17 airlifter. The Chicago-based plane maker said on Wednesday it had seven more of the planes to sell.

Airbus is set to release its 2014 financial results on Feb. 27, when it will disclose the impact of the A400M difficulties on its earnings. A new delivery schedule would be detailed at that time as well, Mr. Enders said.

Write to Robert Wall at robert.wall@wsj.com