Shares in European aerospace giant Airbus have dropped more than 4 percent after the weekend crash of an A400M military plane in Spain fueled investors’ concern over Europe’s largest and hugely delayed defense project.
In trading on Monday, shares in Airbus fell 4.23 percent, underperforming the wider European market which was down less than one percent.
The sell-off in Europe’s biggest aerospace company came after an A400M military plane crashed outside Seville, Spain, on Saturday, killing four crew and prompting Germany, Britain Turkey and Malaysia to ground their fleets of the new troop and cargo carrier.
On Monday, Airbus Group Chief Executive Tom Enders asked the company’s 137,000 employees to observe a minute’s silence at midday for the two pilots and two test engineers who lost their lives. Two others remain in hospital.
“The men who lost their lives in Seville were great professionals; they knew about the risks of their job and they would not want us to stop flying,” he said in a statement.
Enders also said that Airbus would resume testing as planned on Tuesday to demonstrate to customers that the company continues to “fully trust this great transport plane.”
“We are committed to the program and the further ramp-up of deliveries and capabilities as ever,” he added.
Spanish authorities said Sunday they had found the plane’s two black box flight recorders and had handed them over to investigators. The Spanish government has also sent a team to look into the cause of the accident.
The A400M was developed for Spain and six other European NATO members – Belgium, Britain, France, Germany, Luxembourg and Turkey – at a cost of 20 billion euros ($22.33 billion).
After more than three years of delays and billions of euros of cost overruns, European governments injected more money into the project in 2010. But delays and technical problems resurfaced last year, leading to a management shake-up.
In February, Airbus took 551 million euros in charges for the new A400M delays, bringing the total written off over the lifetime of the project to more than 4.75 billion euros.
“Airbus can ill afford more delays,” Hamburg-based Berenberg Bank said in a note after the crash, adding: “Longer-term, this latest development will almost certainly hamper the ability to sell A400M in the export markets, the only way this program will ever make any money.”
The crashed aircraft was due to be delivered to Turkey and was on its maiden test flight.