Airbus says cancels six-jet order from Japan's Skymark

July 29, 2014 - 11:00:00 am

TOKYO: Airbus on Tuesday said it has cancelled a deal with Skymark Airlines for the purchase of six A380 superjumbos, as shares in the Japanese budget carrier plunged in Tokyo.

The Airbus announcement came hours after Skymark said it was locked in "difficult" talks with the European aircraft manufacturer over the order, which was reportedly cancelled due to the airline's poor finances.

Skymark's Tokyo-listed shares plunged about 13 percent to close at 250 yen ($2.45) after the airline said it was negotiating with Airbus to "revise" the multi-plane order inked three years ago.

But in a statement issued after Japanese markets had closed Airbus said the deal was off.

"Following discussions with Skymark Airlines, and in light of the airline's expressed intentions in respect of the A380, Airbus has in accordance with its contractual rights notified Skymark Airlines that the purchase order... has been terminated," Airbus said in a statement.

The announcement came after a French newspaper said Monday that Airbus had cancelled the $2.2 billion contract over doubts that Skymark would be able to pay for the planes.

The airline disputed the story in Les Echos, but acknowledged Tuesday that the deal was in trouble as a sharp decline in the yen since late 2012 jacked up the cost of purchasing the jets while it faced increasingly fierce competition.

The low-cost carrier claimed in a statement that Airbus threatened it with "overpriced" fees to cancel the order as it suggested the small airline be merged into a bigger carrier.

"(Airbus) said it would charge overpriced breakup fees for cancelling the purchase of A380s if our company decides to cancel," Skymark president Shinichi Nishikubo said in a statement.

The airline's president rejected any talk of a merger with a bigger airline.

"We cannot accept a demand that could hurt the independence of our company's management," Nishikubo said, adding that it would "patiently" continue talks with Airbus.

Skymark recently posted its first net loss in five years as stiff competition in the domestic market dented its books. (AFP)



 



 

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