March 29, 2017 / 3:26 PM / a year ago

UPDATE 1-Indonesia in tentative deal for Airbus A400M military planes

(Adds Airbus comments)

PARIS, March 29 (Reuters) - Indonesia has signed a letter of intent to buy Airbus A400M military aircraft, French President Francois Hollande’s office said on Wednesday.

The provisional agreement was signed during a visit to Indonesia by Hollande and covers an unspecified number of aircraft, according to a list of deals issued by his office.

If completed, it would provide the troubled European military programme with a second export customer after Malaysia.

A previous deal to export A400M airplanes to South Africa was cancelled in 2009. Chile was also at one time seen as an export partner for the aircraft, which has run into billions of euros of cost overruns and years of development delays.

Hinting at industrial work as part of any deal, the head of Airbus Military Aircraft, Fernando Alonso, said the aircraft would form the basis of further industrial co-operation and could eventually boost the Indonesian Air Force’s Mobility Arm - a type of unit which typically handles troop transport.

At present Indonesia operates Lockheed Martin C-130 transporter planes and Spanish CASA planes built under licence.

Airbus said the letter of intent was signed by Pelita Air, representing a consortium consisting of state-owned companies.

“Future discussions will address, among other things, the number of aircraft to be encompassed in an eventual contract and possible industrial cooperation arrangements,” Airbus added. (Reporting by Cyril Altmeyer, Tim Hepher; editing by Alexander Smith)

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