MADRID, Spain -- Airbus says it has come to an agreement in principle with A400M launch customers to restructure the contract for the airlifter, and is keeping to its objective of performing a first flight this year.

"We have agreed to a new program baseline, and have an agreement in principle on a revised technical schedule," Rafael Tentor, the A400M program head at Airbus Military, said here at briefings Sept. 22. "We are now working on the details," he said, with the aim of signing an addendum to the existing contract by the end of the year.

At the end of July, the seven customer nations -- Belgium, France, Germany, Luxembourg, Spain, Turkey and the U.K. -- agreed to give Airbus until mid-October to come up with an acceptable plan for renegotiating the terms of the 20 billion euro ($29 billion) contract, which the company says it cannot complete under the initial conditions.

Tentor declined to discuss specifics, including whether there will be a stretchout or cutback in deliveries, a revision in the delivery timetable and pricing or a relaxation of technical specifications and reduced penalties for delays, citing a nondisclosure agreement. But the modified contract will include "firm commitments" from Airbus, including with respect to initial operating capability, he said, and the revised schedule will be in line with a modified timetable presented earlier by the company ensuring initial deliveries three years after first flight.

Suggestions that the contract be broken down into separate development and production awards, or to spin off the TP400 turboprop powerplant into a separate contract, have been discarded, Tentor indicated.

The program leader insisted engineers are "on track" to resolve outstanding technical issues, particularly with respect to the TP400 and full-authority digital engine control (FADEC) software, that have been holding up the first flight. The TP400 has been cleared for flight on the A400M prototype, MSN 1, and Version 3 of the FADEC flight software started testing this week. This version will be audited in October by the European Aviation Safety Agency and integrated into a static engine ground run on MSN 1 in mid-November.

The engines and propellers are currently being installed and all aircraft systems except the FADEC software are now ready for flight.

Photo: Airbus Military