Airbus has terminated an agreement to deliver six A380s to Skymark Airlines after the Japanese discount carrier struggled to raise enough cash to pay instalments on the aircraft.
In a briefing in Tokyo before Airbus's announcement, Skymark's CEO and chief investor, Shinichi Nishikubo, said that Airbus had refused to consider changes to the 2011 purchase agreement, including reducing the number of aircraft or offering smaller planes instead and had notified it of the termination in a faxed message on Sunday.
"We didn't get the chance to sit down and have a formal discussion," Nishikubo said.
The termination marks a setback for Airbus in Japan after it won its first order from Japan Airlines (JAL) last year which agreed to buy more than 30 A350s.
Airbus has struggled to win market share from rival Boeing Co which dominates with around an 80 percent market share helped by strong ties to local aircraft makers such as Mitsubishi Heavy Industries, which make major portions of its jets.
Losses incurred at Skymark as it grapples to win market share from Japan's two dominant carriers, ANA and JAL, meant it was unable to convince lenders to finance the purchase of the six A380s. It had planned to use them for discount business-class only international flights.
Skymark is unlikely to recover JPY¥26 billion (USD$255 million) in instalments it has already paid to Airbus, Nishikubo said. He plans to hold talks with Airbus regarding cancellation fees, he added.
The Skymark cancellation means that no Japanese carrier will now fly the A380. Both JAL and ANA have said they are not interested in buying the largest class of passenger aircraft.
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