Icelandair Group has cancelled plans to lease four Airbus A330-200 freighters which the company's cargo subsidiary had planned to acquire through Avion Aircraft Trading.

"This decision is being made in order to reduce the risk in the operation of Icelandair Group, in consideration of the current economic uncertainty," says Icelandair Group chief Bjorgolfur Johannsson.

"We are presently unwilling to take on a commitment of this size and have therefore exited the negotiations in consultation with Avion Aircraft Trading."

Icelandic lessor Avion ordered eight Rolls-Royce Trent 700-powered A330 freighters last year and signed an initial agreement to transfer four of the type to Icelandair Group - two would be leased directly from Avion while the other two would have been purchased from Avion by Icelandair Group's leasing division, Icelease, before being sub-leased to the cargo subsidiary. The aircraft were due for delivery in 2010 and 2011.

Icelandair Group was intending to use the aircraft to develop long-haul routes, notably to destinations in Asia, and reduce its dependency on the Icelandic market.

Avion chairman Hafthor Hafsteinsson says he was frustrated by Icelandair Group's sudden reversal but has other prospective customers are interested in the aircraft: "The decision was a disappointing one because we have been wasting time for almost a year," he says. "There was no indication from Icelandair that they would pull out and therefore it was surprising at the last minute."

Avion Aircraft Trading earlier this year disposed of an order for eight Boeing 777Fs by selling the slots to German bank DVB's leasing arm Deucalion. These 777Fs are to be leased to the new Lufthansa Cargo-DHL Express venture AeroLogic.

Icelandair Cargo operates five Boeing 757-200 freighters. It says its strategy to develop its operations using efficient aircraft types has not changed but "will be implemented later or with other means".