Rolls Royce hit with £351m Loss after Skymark Cancels Airbus Order

Rolls Royce hit with £351m loss after Skymark cancels Airbus order.Reuters

Rolls Royce is set to lose out on £351m after Japan's Skymark Airlines cancelled an order for six Airbus A380 aircraft.

The Airbus planes were to be fitted with Rolls-Royce Trent 900 engines and the airline had also booked Rolls-Royce's follow-up servicing package – TotalCare – for the engines.

Rolls-Royce, in a statement, said that the cancellation has reduced its order book by £351m ($595m, €443m), or about 0.5% of its £71.4bn order book as of 31 December, 2013.

In early June 2014, the British engine maker lost out on £2.6bn after Gulf-based Emirates cancelled an order for 70 Airbus A350s.

The Dubai-based airline made the decision after reviewing their fleet requirements.

Rolls Royce said that the move will take 3.5% from its order book, but added it was confident of filling the gap.

The aviation sector has enjoyed something of a renaissance over the past couple of years, with huge orders coming in from the Middle East and East Asia.

Earlier this year, VietJetAir (VJA)'s agreed to pay $9bn for 63 Airbus craft, inking a deal first thrashed-out in Paris last September.

The package included $6.4bn of purchases as well as seven leased family aircraft worth $2.6bn.

Previously, the boom in demand had been driven by orders placed at Dubai Airshows editions, as regional airlines expanded their operations to accommodate Dubai's growing status as a transport hub and growing passenger volume.