European aviation giant Airbus has confirmed that a deal to deliver A380 superjumbos to its Japanese client Skymark Airlines has been cancelled. The Asian airline cited financial trouble as the reason for backing out.
Airbus said Tuesday it had written off a deal with Japan's Skymark Airlines for the purchase of six A380 passenger jets. The deal was reportedly cancelled due to the Asian low-budget carrier's poor finances.
"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 a day after French media reports called into doubt the Japanese carrier's ability to live up to its financial commitments in the $2.5 billion (1.9 billion euro) deal.
Skymark had signaled the deal was at risk when the value of the yen began to slide in late 2012, elevating the cost of newAirbus jets
for its fleet.
Skymark recently posted its first net loss in five years as stiff competition in the domestic market hurt its books.
The Japanese carrier indicated it was concerned about overpriced cancellation fees that Airbus might now levy on the company. It said it had little hope of getting back the 190 million euros it had already paid Airbus for the deal that was struck back in 2011.
Skymark's Tokyo-listed shares plunged some 13 percent after it was revealed that the contract with Airbus was in jeopardy.
hg/cjc (Reuters, dpa, AFP)