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PARIS (Reuters) - British taxpayers may have to foot the bill for a $4 million lost deposit on a private jet ordered for top Royal Bank of Scotland executives that will never be used, the French manufacturer said on Thursday.
The recently bailed-out bank is among a list of companies which canceled orders for Dassault Aviation's ultra-modern long-range Falcon 7X business jet and rival models in the wake of the financial crash and fury over boardroom perks.
The list also includes U.S. bank Citigroup, once the world's largest bank which has also been battered by heavy losses.
Citigroup said in January it had canceled an order for a business jet that politicians called wasteful, but officials at Dassault Aviation said it had received a total of three plane cancellations from the U.S. group as it sheds assets.
Citigroup in New York had no immediate comment.
RBS was bailed out by the British government late last year and is mired in a row over a 16.6 million-pound ($23.7 million) pension pot for former Chief Executive Fred Goodwin.
RBS placed the order for a state-of-the-art Falcon 7X business jet worth $40-45 million about five years ago, and the plane was due to be delivered this year, Dassault civil aerospace business head Olivier Villa told Reuters.
The bank canceled the order late last year, he said.
Asked whether the plane, capable of flying from London to Tokyo, had been intended for Goodwin's use, Villa said he did not know but assumed it was for the "top executive team."
Goodwin served as CEO from 2001 until he was forced out in a deal over a government rescue package for the bank in October 2008.
Goodwin has rejected calls from the government to hand back part of his pension, saying it had been agreed by ministers.
The cancellation means the bank, now owned by the British government, will likely forego its deposit.
"Deposits are 10 percent before delivery, which most times we keep," Dassault Chief Executive Charles Edelstenne said.
The Falcon 7X entered service in 2007 and is the world's first business jet built with "fly-by-wire" or digital technology resembling the cockpit of a modern jetliner.
Assembled in Little Rock, Arkansas, its interior includes hand-stitched leather seats and custom-made furnishings.
Its 39-foot-long (11.9 meter) and 92-inch-wide (2.34 meter) cabin is large enough to accommodate 19 passengers, but it usually comes with fewer seats and more spacious fittings.
Business jet demand fell after automakers flew to Washington in luxury jets to seek bailouts, triggering a scandal in the United States and putting pressure on bankers to get humble.
Edelstenne said Dassault would cut production and may lay off workers because it has received more cancellations than orders so far this year. But he called the scandal overdone.
"You have the pillory out in Congress and people saying 'quelle horreur' that anyone uses a business jet. It's an excess reaction that will be balanced in 6 months or a year," he told a news conference after the planemaker reported lower profits.
"When you look at studies, 80 percent of passengers are in middle management. They are not all used by the chief executive or to get tanned in the Bahamas or to go and play golf."
(Editing by David Cowell)