South Africa said Nov. 5 that it had cancelled a big contract for Airbus military planes in a new setback for the troubled A400M program that prompted Airbus to insist the plane was almost ready for test flights.

The decision also left South Africa with a headache with its aging Herculus military transport fleet.

Both sides face contractual issues over cancellation payments and conditions.

Airbus described the decision as a “complete surprise.”

South Africa said it had cancelled a contract to buy eight of the aircraft because of delays and a seven-fold cost rise in rand terms.

The A400M version of the Airbus plane has been bedeviled by cost overruns and delivery delays. The entire 20 billion euro ($28 billion) project was put in doubt at one point.

South African government spokesman Themba Maseko said “the cost escalation would have placed an unaffordable burden on the taxpayer” in an economic downturn.

The director for programs at Airbus, Tom Williams, said at the group’s headquarters in Toulouse that the cancellation was a “complete surprise.”

“We are so close to the first flight. I have a lot of confidence it will fly before the end of the year.”

Airbus would now have to review the contractual situation with South Africa. “It’s up to us to go back and have discussions,” he said.

A spokeswoman for Airbus Military said it was looking into “the potential financial impact of this announcement.”

The contract for the A400M was agreed five years ago, when the South African government said the planes would cost about 830 million euros ($1.2 billion), or 6.4 billion rand.