Friday, 21 January 2022

Airbus Updates No.3738

 Qatar Airways’ A321neo Order Cancelled By Airbus Amid A350 Dispute

In the ongoing dispute over A350 surface degradation issues, Airbus has announced that it has canceled Qatar Airways’ order for 50 A321neos. What started as reports of abnormal paint issues in January of 2021 has escalated significantly over the past 12 months, with a legal showdown looming.

A31neo Qatar
Qatar Airways originally placed its A321neo order in 2011. Photo: Airbus

A longstanding order canceled

First reported by Bloomberg News, the European planemaker appears to have canceled the longstanding order on January 20th after pre-trial proceedings took place in British High Court. It’s noted that Airbus’ termination of the contract followed skeletal arguments presented during a scheduling session over the A350 dispute.

Although Qatar Airways had notably halted deliveries of its outstanding A350 orders amid the escalating dispute, this latest move by Airbus to terminate a separate contract for different aircraft is indeed quite surprising. A spokesperson for the planemaker confirmed the news to Simple Flying, stating:

“We confirm we did terminate the contract for 50 A321s with Qatar Airways in accordance with our rights.”  -Airbus

Simple Flying has reached out to Qatar Airways seeking a statement from the airline. At the time of this article’s publication, no response has been received.

In 2011 Qatar Airways placed an order for A320neos and this was later adjusted to be 50 A321neos in 2017. The order, Airbus noted, had a list price value of $6.35 billion. Two years later, Qatar Airways announced that it was converting 10 aircraft in this 50-aircraft agreement to the Airbus A321LR variant.


Courtroom showdown looming

Over the course of 2021, much has unfolded in this dispute. Qatar Airways grounded its affected A350s under the guidance of Qatar’s Civil Aviation Authority, with the airline later halting deliveries of outstanding A350 orders.

Later in the year, Airbus stated that it was seeking a legal assessment as it felt that an undisclosed airline (likely Qatar Airways) was damaging its reputation because of the ongoing paint and surface degradation claims.

The entire situation further escalated with Qatar Airways filing a lawsuit in UK High Court. The carrier is also seeking $600 million in damages and compensation over the grounding of its A350 aircraft. According to Reuters, a procedural hearing on the case is scheduled in London during the week of April 26th.

Airbus A350, Qatar Airways, 2021
Despite its A350 grievances, Qatar Airways was the type’s top operator in 2021. Photo: Vincenzo Pace | Simple Flying

An incredibly rare move

While airlines cancel orders for aircraft from time to time, usually due to financial issues or changing market conditions, it’s incredibly rare for a planemaker to be the party terminating the contract. Aside from issues relating to government sanctions, Thursday’s move by Airbus may indeed be the first case of an aircraft manufacturer canceling an agreement for an order placed by an airline.

Reuters notes that Qatar Airways is expected to fight Airbus’ termination of the A321neo order contract, despite the airline’s refusal to take delivery of A350s until the surface degradation dispute can be resolved.

While a major investigation undertaken by Reuters unearthed reports that at least five other airlines had noted paint or surface flaws since 2016, Qatar’s civil aviation authority is so far the only entity to order affected aircraft to be grounded.

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