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Skymark shares plunge 14% after Airbus cancels deal

Shares in Skymark dived 14 per cent on the Tokyo Stock Exchange early Wednesday (July 30) after Airbus said it has cancelled a $2.2 billion deal with the Japanese budget airline.

TOKYO: Shares in Skymark plunged for a second straight day on Wednesday (July 30) wiping out a quarter of its value -- about $64 million -- after Airbus said it has cancelled a deal with the Japanese budget airline worth more than $2 billion.

The firm closed down 13.60 per cent at 216 yen after the European plane-maker late Tuesday said it had pulled out of the deal for the purchase of six A380 superjumbos, with reports saying it was over concerns about payment.

It had already slumped 13 per cent on Tuesday in response to a French newspaper report that Airbus was about to make the move. The Japanese airline had said it was negotiating with Airbus to "revise" the $2.2 billion order, which was signed three years ago.

Skymark said the deal was in trouble as a sharp decline in the yen since late 2012 had jacked up the cost of purchasing the jets, while it also faced increasingly fierce competition. The airline recently posted its first net loss in five years owing to stiff competition in the domestic market. 

Skymark, which launched in 1998, flies dozens of domestic routes with a fleet of thirty aircraft. It reports its latest financial results on Thursday.

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