Skymark shares dive as Airbus lawsuit looms

Tokyo - Shares in Japan's struggling Skymark Airlines slumped more than 16% Monday after it said Airbus was moving closer to filing a lawsuit over a failed $2.2bn jet order.

The Tokyo-listed stock plunged 63 points to 319 yen after the airline said in a statement dated Friday that Airbus had filed a notice with a British court that it has started preparatory work on a possible lawsuit against Skymark.

The deal for six Airbus A380 jets was signed in 2011 but the European planemaker cancelled the order in July - apparently over concerns it would not get paid.

Skymark is trying to reduce a breach of contract penalty.

Airbus has called on Skymark to merge with a bigger airline, a proposal the Japanese firm's top executive flatly rejected.

But Skymark has recently said it is considering asking for help from domestic giant All Nippon Airways while also eyeing a tie-up with Japan Airlines.

Skymark said in the latest statement that its talks with Airbus were continuing, but did not elaborate.

The carrier previously said the aircraft manufacturer had threatened it with "overpriced" penalties.