ST kena aeroplane... -1000 US peanuts

[Apollo]

April 9, 2008

ST Aero loses US$635m contract with US low-cost carrier Skybus

Skybus files for Chapter 11 protection

 

By Nicholas Fang

SINGAPORE Technologies Aerospace (ST Aero) is facing a US$635 million (S$877 million) hit to its orderbook after one of its customers in the United States filed for bankruptcy on Monday.

 

ST Aero, the aerospace arm of ST Engineering, said in a statement on Wednesday that it would reduce its orderbook accordingly following the Chapter 11 bankruptcy filing by low-cost carrier Skybus Airlines.

 

The airline, which is based in Columbus, Ohio, cited the inability to overcome rising jet fuel costs and a slowing economic environment as reasons why it ceased operations last Saturday.

 

ST Aero had clinched a 12-year contract in November 2006, worth US$635 million starting from 2007. The deal was awarded by Airbus which was supplying Skybus with A319 aircraft.

 

ST Aero's US facility, ST Mobile Aerospace Engineering, was contracted to provide support covering aircraft line and light maintenance, components management and support, engineering and technical services for Skybus' fleet.

 

The fleet was expected to grow up to 66 aircraft but only 11 were being operated at the time when Skybus ceased its operations.

 

ST Aero said that work commenced when Skybus began operations in the middle of last year.

 

'With Skybus Airlines' bankruptcy, ST Aero's orderbook value would be reduced accordingly,' ST Aero said in a statement on Tuesday.

 

The company said there would not be any material impact on its results for the current financial year.

 

ST Engineering turned in a total orderbook of S$9.5 billion last year. The company does not provide details of its subsidiaries' orderbooks.

 

ST Aerospace announced earlier this year it has secured a contract worth S$87 million to provide comprehensive engine maintenance and engineering support to South Africa's Comair.

 

It will service the 20 engines on Comair's fleet of 10 Boeing Classic 737s over the next eight years.

 

 

http://www.straitstimes.com/Latest%2...ry_225441.html

 

many budget airlines r closing down now in USA

Edited April 9, 2008 by Apollo

[Jayq]

Isn't it 10 US peanuts only.

[Apollo]

1 peanut = $600K

1000 = 600 mil

[Try_conti]

hmmm ... "The deal was awarded by Airbus which was supplying Skybus with A319 aircraft" ..... can go after Airbus since they are the ones that award the contract ?

 

But its kind of strange that its not the airline but the plane manufacturer that award the contract .....

[Apollo]

one skybust.. the other one about to airbust...

[Try_conti]

airbust .... ? not likely, that one setup to give the americans a run for their $$$, won't go airbust one.... got EU behind .....

[Sosaria]

This one is just paper loss lah. It's not like they already provided some years of service for free. It's just a cancellation of contract and the loss is mostly future earnings...

 

Of course, the accounts people would think differently...

[Bugsbunny]

Ya just paper loss.

agree