Germany Cancels Order for Eurofighter Jets

BERLIN--Germany has canceled the delivery of 37 Eurofighter jets valued at 3.5 billion euros ($4.8 billion), two officials told The Wall Street Journal Wednesday.

But the terms under which Germany might cancel its order and how formally the decision has been made were unclear. Airbus Group NV, which handles the German Eurofighter contract, said it had not been told of a government decision.

"We have existing agreements," a spokesman for the Defense & Space unit of Airbus said. "We have not been informed of any changes."

German Deputy Defense Minister Stephane Beemelmans told a meeting of the lower house of parliament's defense committee on Wednesday that Germany has canceled the final tranche of 37 jets, according to one of the officials, a parliamentary official who attended the meeting and declined to be identified. A government official confirmed the decision. Germany had ordered 180 Eurofighters.

The ministry cited cost as the reason for the cancellation, and said Germany doesn't need the final 37 planes in its order, the parliamentary official said.

The ministry canceled the order on Dec. 17. It agreed to pay a cancellation penalty of EUR54 million to MTU Aero Engines, a German engine maker involved in the project, according to the parliamentary official.

The Eurofighter is built by a consortium French-German-Spanish Airbus, BAE Systems PLC of Britain and Italy's Finmeccanica SpA.

Germany now operates 107 Eurofighters and has another 36 on contract before the 37 in question, the Airbus spokesman said.

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