General Electric Capital Aviation Services (GECAS) last week cancelled its order for 50 Fairchild Dornier 728 jets, adding to the woes of the US-German manufacturer. The blow was softened, however, by approval of a $90 million loan from a consortium of German banks to allow the manufacturer to continue to operate for the next few months while its administrator determines whether it can be restructured to survive.
GECAS declines to comment on the cancellation, but confirms that options are open to re-order the 70-seat regional jet should Fairchild Dornier regain financial viability. GE sources confirm that the firm order cancellation is definite, despite ambiguous statements from Fairchild Dornier which appear to cast doubt over the finality of the move. Fairchild Dornier says that the leasing company's action follows US legal advice after the manufacturer filed for insolvency.
Lufthansa has 60 firm orders and 60 options for the 70-seater, and CSA Czech Airlines has eight firm orders. The German flag carrier reaffirmed its commitment to the jet. "We still believe in the project," says Lufthansa. "We hope there is a solution so that the jet can be built."
Fairchild Dornier already has a $20 million advance from the banks behind the rescue deal - Bayerische Landesbank, KfW and Hypovereinsbank. The loan will allow operations to continue until 17 June, when administrator Eberhard Braun will decide whether the firm can be returned to health or declared insolvent. Braun has slashed the US operations and workforce, halting 328JET wing production and eliminating sales and marketing posts.
Source: Flight International
