Aircraft

United likely to cancel 42 outstanding A320 orders

By Laura Mueller

United Airlines is likely to cancel the remaining 42 Airbus A319/A320s it has on order, a decision which will cost the carrier more than $90 million in lost aircraft deposits.

The airline, which holds orders for 23 A319s and 19 A320s powered by International Aero Engines V2500s, disclosed in a 10-Q financial filing with the US Securities and Exchange Commission that it was likely to drop the aircraft.

"United believes it is highly unlikely that it will take delivery of these [42 Airbus] aircraft in the future, and therefore believes it will be required to forfeit its $91 million of advance delivery deposits," the airline says, adding that the deposits are "not transferable".

It notes in the July filing that the purchases are still included under its total commitments, "as the company has not formally terminated the orders".

In a previous 10-Q submission, filed in May, United said it had reached an agreement in January 2006 with the manufacturer to "delay, with the right to cancel" these future orders.

United has also reached an agreement with IAE "eliminating all provisions pertaining to firm commitments and support" for future Airbuses.