Airbus Updates No.3782

 Qatar Airways Wants To Undo Airbus' A321 Order Cancellation

Qatar Airways is seeking an injunction against Airbus to stop the aircraft manufacturer canceling its A321neo order.

The dispute between Qatar Airways and Airbus continues to bubble away with the Doha-based airline in court on Friday trying to stop Airbus canceling an order for A321neo planes. Earlier this month, Airbus canceled an order for 50 A321neos and two A350-1000s after Qatar Airways sued the plane manufacturer and refused to take further delivery of completed A350s.

Qatar Airways chasing an injunction stopping A321neo cancellation

Now Reuters is reporting that Qatar Airways asked a London court on Friday for an injunction to prevent Airbus canceling the A321neo order. Qatar Airways was expecting six A321neos a year from next February. Qatar's lawyer, Philip Shepherd, told the court the cancellation was "a hand grenade thrown in our bunker," and said the decision to do so was misguided and illegal.

The bad blood between Qatar and Airbus stems back to an issue over blistered paint and degradation to anti-lightning protection on Qatar's existing A350s. Qatar says the problem has forced the grounding of 21 planes. Airbus denies there is a safety issue. The airline went on to sue Airbus for US$600 million plus $4 million a day while it awaits for a formal analysis of the problem. Airbus is reportedly preparing a counter-claim again Qatar over the A350 matter.

"They took the risk and knew it would be absolutely incendiary. We have paid $330 million for this A321neo contract so far," Mr Shepherd told the court. He said canceling the A321neos was a tactical move designed to put pressure on Qatar over the A350 dispute.

Airbus questioned if cancellation was a self-serving decision

Some observers have questioned why Airbus decided to cancel the A321neo order in its entirety while only canceling two of the A350s. Qatar Airways originally ordered 42 A350-1000s of which 19 have been delivered. Take off the two canceled planes and 21 A350-1000s remain due. However, the A350 is a slow seller at Airbus whereas the A321neo sells like hotcakes. At a recent Airbus media conference, Airbus CEO Guillaume Faury denied self-interest was at play and that the manufacturer canceled the A321neo knowing it could easily resell the planes but only trimmed the A350 order knowing the resale process would be a much harder task.

Airbus says reinstating Qatar's A321neo order would cause problems for other customers

While acknowledging other airlines had blistered paint and degradation issues with their A350s, no airline other than Qatar Airways was viewing it as a safety issue. Mr Faury also noted EASA was not viewing the matter as a safety issue.

Airbus says when Qatar stopped paying for the remaining A350s per the original contract, they breached that agreement and triggered a clause in the A321neo contract allowing it to cancel.

On Friday, Airbus told the court they'd removed Qatar's A321neo order from its production schedule and reinstating it would cause significant delays to other customers. As of January 31, Airbus had undelivered orders for 3,359 A321neos. Just 103 A350-1000s are undelivered. Qatar accused Airbus of a "campaign of terminations and disruptive behavior."

A hearing on Qatar's request for an injunction is set to begin in London on April 4. The ongoing A350 dispute is due back in court on April 26.