Airbus, the commercial arm of aerospace firm Airbus Group NV, has withdrawn orders for 10 jumbo A380 and A350 planes by grounded Kingfisher Airlines Ltd, the company's global sales chief said on Monday.
The move comes as further embarrassment to Kingfisher, which had with much fanfare in 2005 placed an order for five superjumbo A380 aircraft -- with the option to buy five more -- and an identical number of A350 jumbos.
It was not immediately clear what will happen to the pre-delivery payments, the 1-5% of aircraft costs usually paid by airlines at the time of booking a firm order.
Kingfisher, owned by brewer UB Group, shut operations amid mounting losses in October 2012 but has orders that were booked in the years before the shutdown.
On Monday, Airbus global sales chief John Leahy said Vijay Mallya was still "determined" to sell the airline but that Airbus had concluded that some of Kingfisher's aircraft orders could be cancelled.
"The Kingfisher order -- not all of it was cancelled, there are still some single aisles. Speaking with Vijay Mallya, he is still determined to sell the airline; he has an operating certificate. But even if he does sell the airline, we took the decision internally here that he probably does not need the A380s just right now so we are taking them out of the order book along with the A350s," Leahy said at a press briefing in Toulouse, France, that was telecast live.
The A350s are intercontinental jets.
Airbus, produced by a European multinational consortium, shows 117 orders for Kingfisher and its low-fare airline Kingfisher Red (earlier called Air Deccan) in its order book online. Of these, 25 have been delivered, it says, although none are operational. Delivery dates for the remaining 92 aircraft are not known. After the Monday announcement, the order size may shrink to 82. Airbus did not specify any numbers immediately in an emailed reply.
The A380 superjumbo costs nearly $300 million at list prices.
Kingfisher has till the end of this year to restart operations, under regulatory rules. If it doesn't, its flying licence will lapse and it will have to apply for the licence again.
But restarting operations will be difficult. The Mumbai-based airline had accumulated losses of Rs.16,023.46 crore as on 31 March and its net worth is a negative Rs.12,919.82 crore. It hasn't paid salaries to its staff for more than a year.
This month, Kingfisher employees resumed their stir for payment of 17 months' salaries, staging protest marches and hunger strikes. Kingfisher has appealed to them to call off the demonstrations.
Kingfisher, however, said it continues to work towards resuming operations.
"We continue our efforts to recapitalize and restart Kingfisher. However, there are no plans to fly long haul and, hence, the cancellation," a Kingfisher spokesman said.
Kingfisher was the only airline in India to order the A380 planes, which were put on demonstration flights as early as 2007.
Copyright 2014 - Mint, New Delhi
