South African Denel could abandon the manufacture of Airbus A400M

JOHANNESBURG (Reuters) – South African Armenian company Denel is in talks with Airbus about reducing parts production for the European planner's A400M military aircraft, Denel said Saturday.

Denel, the cornerstone of South Africa's once-powerful defense industry, is struggling to emerge from a financial and operational crisis. In February, he said he could sell stakes in some divisions as part of a strategy to restore profits within two years.

The company is also trying to renegotiate onerous contracts and sell parts of its business that are no longer viable after recording a loss of 1.7 billion rand ($ 117 million) in fiscal 2017 / 18.

Denel said that he had not yet finalized the terms with Airbus for the gradual reduction in production of the A400M.

"Both companies have agreed that Denel's continued manufacture of aircraft parts is no longer sustainable in its current form," Denel said in a statement. "Alternative options are now under study between the two parties."

Denel will try to minimize the impact on jobs in his aerospace division, he added.