29th Jul 2014 10:07
LONDON (Alliance News) - Rolls-Royce Holdings PLC was Tuesday hit by another cancellation of an order for large Airbus aircraft that had been due to be fitted with the British company's engines, just weeks after a cancellation wiped about 3.5%, or GBP2.6 billion, off its order book.
In a statement, the aircraft and marine engine maker said Airbus had terminated an order for six A380 aircraft from Skymark airlines of Japan. The planes, which had been due for delivery between 2014 and 2015, had been due to be fitted with Rolls-Royce Trent 900 engines and the airline had also booked Rolls-Royce's follow-up servicing package for the engines.
Rolls-Royce said the new cancellation had reduced its order book by GBP351 million, or about 0.5% of its GBP71.4 billion order book as at December 31, 2013.
In early June, Emirates airline had decided to cancel an order for 70 Airbus A350 aircraft, which had been due to be fitted with Rolls-Royce Trent XWB engines. The deal also included an engine servicing contract. Rolls-Royce said at the time that it was confident that the A350 delivery slots vacated by the Dubai-based airline would be taken up by other airlines.
However, since then, Airbus selected Rolls-Royce as its exclusive supplier of engines for its new A330neo aircraft. Rolls-Royce has developed a new version of the Trent 700 engine for the plane. The British company immediately announced orders to fit the engine to 25 A330neo's ordered by Air Lease Corp, five A330's to be leased by Airbus to Kuwait Airways, 15 A330neo's for aircraft leasing company CIT, as well as an order for the Trent 7000 engine for 15 Airbus A330-900neo aircraft ordered by aircraft leasing company Avolon and for 50 of the same aircraft and engines from Air Asia X. Hawaiian Airlines also bought six Airbus A330-800neo aircraft, powered by the Trent 7000.
The British company has also won deals to provide its Trent XWB to power six Airbus A350 XWB aircraft ordered by Air Mauritius, and a contract with United Airlines to extend its servicing support for the lifetime of RB211-535 engines operated by United on Boeing 757 aircraft.
Airbus cancelled the order for the world's largest passenger plane from Skymark Airlines after a disagreement over contractual obligations and other conditions attached to the deal, according to the Wall Street Journal.
"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 for the six A380s signed in 2011 has been terminated," the European aircraft maker and competitor to Boeing Co of the US said in a statement.
Rolls-Royce shares were up 0.6% at 1,059.83 pence Tuesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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