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Airbus A400M delivery could slip into July: sources

PARIS (Reuters) - The first delivery of the Airbus A400M, Europe's new military airlifter, could slip beyond its second-quarter target date and take place in July, industry sources said.

The first aircraft is being readied for delivery to France, one of seven European NATO nations that developed the heavy cargo and troop transporter at a cost of 20 billion euros.

Designed to give Europe's military an urgently needed independent transport capability, the A400M is four years behind schedule, after problems with the largest ever Western-built turbo-prop engines led to a 3.5-billion-euro bailout in 2010.

France, which ordered 50 of the heavy cargo and troop transport planes, is expected to have its first aircraft in time for Bastille Day celebrations on July 14, the sources said.

Airbus Military said it expects to deliver the aircraft in coming weeks, depending on final formalities for the handover.

An Airbus spokeswoman declined to comment on whether any slippage into the third quarter would affect the schedule of financial payments from a seven-nation arms procurement agency coordinating the purchase, known as OCCAR.

"As this is part of the contractual agreements with our customer OCCAR we are not in a position to comment on financial milestones," she said.

Airbus parent EADS told analysts on May 14 that the A400M would be delivered to France in the second quarter.

A French government official told Reuters that no final decision had been reached on when the handover would take place.

(Reporting by Tim Hepher; Editing by Chris Reese)