Airbus stresses that it, rather than the airline, cancelled Flyington Freighters' order for 12 A330-200Fs following "non-payment of pre-delivery payments".
An Airbus spokesman adds: "Every deal is important to us and demand for A330s has never been higher. However, when a customer doesn't meet its obligations despite attempts to work with them, Airbus must protect its production process and assign the delivery slots to other customers.
"This is standard order book management."
The Indian start-up carrier had been the first cargo operator to sign up to the new type when it ordered six in 2007, before doubling its commitment later the same year.
The cancellation leaves Airbus with orders for 54 of the type on its books, of which five have been delivered to Etihad Airways, Hong Kong Airlines and Turkish Airlines.