Airbus, Qatar Airways back in court as plane row heats up -Breaking
© Reuters. FILEPHOTO: Airbus A321neo pictured at Le Bourget Airport near Paris during the 52nd Paris Air Show on June 21 2017. REUTERS/Pascal Rossignol
By Tim Hepher
LONDON (Reuters] – A British judge will decide Tuesday whether Airbus should continue to build A321neo planeliners for Qatar Airways. The decision has implications for potential multi-billion-dollar future jet deals.
Airbus pulled out of the A321neo agreement in January as a retaliation to Qatar’s refusal for them to cease taking A350s. This was in response to a separate safety and legal dispute regarding damage to larger aircraft surfaces.
Some airlines were alarmed by the decision to cancel A321neo’s deal, and the International Air Transport Association head described it as “worrying” in an area of the market that Airbus receives the majority of its new orders.
Dubai’s Emirates head has stated that he was “not unfeeling” for its Gulf counterpart over the A321neo scandal.
Airbus claims that the contracts are linked by a cross-default clause, which allows Airbus to cancel one contract if an airline does not honour it.
Qatar Airways is the largest customer of A350. It was accused of inflating safety concerns to prevent taking planes during weak demand.
Qatar claims it had the right to cease accepting A350 deliveries because of safety concerns raised by Doha’s regulator about gaps in lightning protection and corrosion exposed by cratered paint from over 20 grounded A350s. The cross-default clause is not applicable in all cases, it says.
Officials at Airline worry that the A321neo dispute could set an example for disputes to bounce from one contract into another. This would tighten the grip on plane giants Airbus or Boeing (NYSE:).
The head of an airline’s large fleet stated that “people will take notice and resist these cross-default clauses.”
Airbus, which is supported by European regulators denies that the A350 has safety problems. However, it admits that modern carbon jets can cause paint peeling, which requires re-painting of aircraft more frequently.
Qatar Airways claims the decaying paint and subsequent lightening of carbon fuselages is due to an error in its design.
A Reuters investigation revealed that the issue was also affecting other airlines in November. However, Qatar has not taken any planes off service except for surface repairs.
These two sides are at odds over how much exposed lightning protection should be considered a danger. Airbus insists that planes carry backup protections. However, the areas affected would have to have a greater risk to cause a serious hazard. Qatar Airways stated that it is unable to rule out these risks and will not take more A350s from Airbus until this point.
Both sides were furious at Qatar’s refusal of taking delivery and it led to a row about the A321neos cancellation.
This court battle broke the seal on more than a decade worth of negotiations about aircraft and lifted the veil from closely guarded methods within the global jet industry.
Multiple sources in the industry say that it’s not in either side’s best interest to start a full-scale test, creating a torrent of disclosures and testing relations with Qatar and France at a moment when Europe desperately needs new gas supplies.
Although neither party has yet to close the door on a settlement, the preliminary hearing Tuesday is likely to show the amiable nature of the unusually bitter divorce.
Airbus made an unusual move in a hearing to minimize the benefits of the A321neo, its top-selling product over Boeing’s 737 MAX. This was contrary to its marketing claims.
It was described by most experts as a legal maneuver to stop Qatar from seeking to renew the A321neo contract. The success of Qatar depends on convincing the UK judge there’s no other option.
Guillaume Faury, Chief Executive, retorted against Boeing one week later. He told a shareholders meeting that “our planes have more competition for most of them than…the competition; especially the A321 is exceptionally performing.”