Airbus responds to Qatar Airways’s A350 dispute by cancelling A321 Order

Airbus on Thursday, January 20 raised the stakes in a dispute with one of its largest customers, Qatar Airways, over grounded and undelivered A350 jets by announcing it had revoked a separate contract for 50 smaller A321s the airline needs to open new routes.

The move is expected to deepen a dispute that moved closer towards a rare courtroom clash on Thursday, January 20, with a procedural hearing over Qatar’s claim for USD 600 million in compensation over A350 flaws pencilled in for the week of April 26 in London.

Qatar Airways A321 (Image Courtesy – International Flight Network)

Airbus revealed it was walking away from the contract for A321neos in skeletal arguments presented during a scheduling session over the A350 dispute at a division of Britain’s High Court, people familiar with the matter said.

“We confirm we did terminate the contract for 50 A321s with Qatar Airways by our rights,” an Airbus spokesman said following a filing setting out provisional arguments, reported earlier by Bloomberg News.

Qatar Airways is expected to fight the A321 contract’s termination, has said it plans to take delivery of the jets even though it is refusing to take more A350s until a dispute over surface erosion on the larger planes has been resolved.

The airline had no immediate comment on the A321 contract.

The A321 order stems from a deal first signed some 10 years ago which was then worth USD 4.6 billion at list prices. It was later modified to switch 10 of the A321s to a newer version.

Qatar Airways has said the A321s will help it launch flights to new markets where there is currently not enough demand for larger aircraft, but which are out of reach of smaller A320s.

The planemaker said these decisions were carried out “apparently at the instigation” of Qatar Airways but didn’t offer specifics. Demand for air travel has been depressed for two years because of the pandemic, especially on the long-distance routes that intersect at Gulf hubs like Doha.

For its part, Qatar Airways is seeking resolution of the dispute in time to use grounded A350 aircraft at the centre of the row for the soccer World Cup later in 2022.

Qatar Airways is the main sponsor for the soccer World Cup later in 2022.

Grounding Dispute

The two companies have been locked in a row for months over A350 damage including blistered paint, cracked window frames or riveted areas and erosion of a layer of lightning protection.

Qatar Airways says its national regulator has ordered it to stop flying 21 out of its 53 A350 jets as problems appeared, prompting a bitter dispute with Airbus which has said that while it acknowledges technical problems, there is no safety issue.

Qatar Airways is seeking USD 618 million in compensation for the 21 grounded jets plus USD 4 million a day as the row drags on. The Gulf carrier is also asking British judges to order France-based Airbus not to attempt to deliver any more of the jets until what it describes as a design defect has been fixed.

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Airbus has said it will “deny in total” the complaint and has accused Qatar Airways, once one of its most highly courted customers, of mislabeling the problem as a safety concern.

It has indicated it will argue that state-owned Qatar Airways influenced its regulator to ground the jets to win compensation, while Qatar Airways has questioned the design and accused Airbus of failing to produce studies, the people said.

Qatar Airways has said its local regulator is independently driving safety decisions and cannot evaluate the airworthiness of the affected jets without a deeper analysis from Airbus.

The paint flaw in Qatar Airways’ A350 (Image Courtesy – Reuters)

The European Union Aviation Safety Agency, which is responsible for the overall design but not the locally regulated airworthiness of individual planes in service, has said it has not so far found safety problems with A350s that it inspected. Qatar is so far the only country to ground some of the jets.

But a Reuters investigation in November 2021 revealed at least five other airlines had discovered paint or surface flaws since 2016, prompting Airbus to set up an internal task force before the Qatar row and to explore a new A350 anti-lightning design.

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(With Inputs from Reuters)