Kawasaki Heavy Industries Ltd. said on Thursday it will end its 15-year- old contract with Airbus to supply body panels for A321 aircraft at the end of March.

In 1991, Kawasaki Heavy started dealing with Airbus as the first Japanese company to provide Airbus with major body panels.

The company said it decided not to renew the contract because the two companies failed to agree on terms for its renewal.

Media reports in Japan assume that Kawasaki Heavy has favored Boeing Co. for which it enjoys large sales, and that the company couldn't reach an agreement with Airbus on terms for contract renewal.

The A321 started operating in 1994. Kawasaki Heavy's major plant in Gifu Prefecture, Japan, has supplied main wings for around 370 airplanes. The plant will continue operation for the remaining orders from Airbus by the end of December and will carry over the rest to different makers.

Japan