European engine beats off rival

The engine contract is worth 3-4bn euros

A European-made engine has been chosen to power the new military Airbus, beating off a rival bid from North America.

The European aerospace company EADS, made its choice after the price was dropped.

The engines will be made by Europrop International, a consortium of the French state-owned engine maker Snecma, Rolls Royce in the UK, MTU of Germany and Spain's ITP.

On Wednesday Snecma said it was unlikely to make much money out of the contract.

"Our objective is to earn money but if you asked me if we would make a lot, the answer is probably not," chairman Jean-Paul Bechat told reporters at a briefing.

He said the initial value of the contract was 2bn euros (£1.4bn) but it could be worth 3-4bn euros including maintenance over the plane's lifetime.

Safeguarding jobs

Originally rival bidder Pratt & Whitney of Canada had put in a bid 20% cheaper than the one from Europrop.

A statement from EADS said its board of directors was unanimous in its decision to opt for the European engine "in light of a substantial effort" to make the price more attractive.

Both EADS and Airbus were reported to have come under pressure from European governments to choose the European TP400-D6 engine over its Pratt & Whitney rival.

The decision should safeguard jobs in the defence industry in Europe.

Airbus already has 180 orders for the A400M transport plane and the aircraft is due to come in to service in 2009.