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Airbus declines comment on report that Skymark to drop A380
July 28, 2014 / 4:55 PM / 3 years ago

Airbus declines comment on report that Skymark to drop A380

PARIS, July 28 (Reuters) - European planemaker Airbus declined to comment on Monday on a report that it had agreed to drop an order for six A380 superjumbos from Japan’s Skymark Airlines.

Bloomberg News reported that Airbus had agreed to release the loss-making airline from its contract for financial reasons.

However, it also quoted a person involved in talks as saying the negotiations continued and that options ranged from delaying delivery to outright cancellation.

“We have no comment,” an Airbus spokesman said.

If confirmed, the move would take the number of A380 orders threatened by cancellation in recent weeks to 16, or 8 percent of the outstanding order backlog of 189 aircraft.

Reuters reported earlier this month that Hong Kong Airlines was poised to cancel an order for 10 of the superjumbos after an associated leasing company struck an expanded deal to buy 70 smaller A320-family aircraft.

Since March the order has no longer been attributed to the Hong Kong carrier but to an “undisclosed” customer, raising questions over its status, according to a review of Airbus data.

Airbus officials said at the Farnborough Airshow this month that the Hong Kong order remained on its order book.

Skymark was due to take delivery of its first A380 around the end of this year, but the airline said in June this had been pushed back by up to six months due to problems in fitting out the interior of the world’s largest jetliner. [ID:nL4N0OU2TN}

Industry sources say the supply chain for certain interior items that airlines buy directly from suppliers, such as seats and galleys, is tight.

But they also say that Skymark, which swung to a loss in its last financial year, faces a challenging task in taking delivery of the double-decker jets, which were worth around $350 million each at list prices when it placed its firm order in 2011.

Airlines pay most of the cost of buying a jet on delivery.

A person familiar with the matter said Skymark wanted Airbus to release it from the contract but that the European planemaker had until now been reluctant to do this. The source said Skymark wanted at least to postpone delivery again beyond mid-2015.

No one at Skymark Airlines was available for comment.

Skymark, Japan’s third largest airline, is the only airline in the country to have ordered the European superjumbo.

The huge jet has so far had little take-up from low-cost carriers, which tend to operate with fewer of the partnership agreements and loyalty programmes which help traditional network carriers sell tickets and make the 525-seat jet profitable.

The Centre for Aviation (CAPA), an airlines consultancy, has warned that Skymark could encounter “significant losses” if it put the A380 into service without such agreements and that the airline would need changes in strategy to make it viable.

Reporting by Tim Hepher; Editing by Greg Mahlich

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