United likely to cancel 42 outstanding A319/320s

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United Airlines is likely to cancel its outstanding order for 42 Airbus A319/320 aircraft, a decision which will cost the carrier over $90 million in lost aircraft deposits.

The Star Alliance member, which still has 23 A319s and 19 A320s on order, has disclosed in a 10-Q filing with the US Securities and Exchange Commission that it will probably not be taking the jets.

“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 also reached an agreement with the powerplant manufacturer, International Aero Engines, “eliminating all provisions pertaining to firm commitments and support” for future Airbuses.


Source: flightglobal.com's sister premium news site Air Transport Intelligence news