Skymark Airlines confirms challenged negotiations with Airbus on cancellation of A380 orders

Skymark Airlines confirmed (29-Jul-2014) plans to cancel its order for A380 aircraft, noting that it its in talks with Airbus Group on cancelling the USD1.7 billion order for up to six of the aircraft types. The Japanese carrier noted that it has been preparing for the introduction of A380 for four years, but the carrier has been forced to change this plan amid a "deteriorating" environment, characterised by a weak yen and strong competition. The carrier said it has held talks with Airbus since Apr-2014, although the talks are "not making good progress". Skymark said the manufacturer is demanding that the carrier join a larger airline group as a condition for making any changes in the order leading to a stalemate in negotiations, adding that should Skymark refuse to comply, Airbus is requesting an "outrageous" cancellation fee "beyond the realm of common sense". Skymark said: "We cannot accept a demand that would shake management independence," adding "It is unthinkable that we join another group". Skymark stressed that its operation as an independent carrier is what has enabled it to offer reduced fares, adding that despite current financial strains, it remains debt free and load factors have been improving. [more - original PR - Japanese] [more - CAPA Analysis]