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.

Airbus Updates No.3741

 

Airbus cancels Qatar Airways A321neo-order

In an unprecedented step, Airbus has taken the decision to cancel an order Qatar Airways had with the manufacturer for 50 A321neos. In a short statement the company said "We confirm we did terminate the contract for 50 A321s with Qatar Airways in accordance with our rights."

The move comes as Qatar Airways and Airbus are in an escalating dispute regarding the grounding by the Qatar Civil Aviation Authority of thirteen Qatar Airways A350s that are suffering from accelerated surface degradation of its composite fuselage at the tail-section. As a result of that grounding, Qatar has paused taking deliveries of new A350s and is demanding that Airbus fixes the root-cause of the issue as the aircraft are, according to them, unsafe.

Airbus, in their turn, says the issue with the paint is purely cosmetic and doesn't impact the safe operations of the A350 and that the airline is deliberately stating "mischaracterizations of non-structural surface degradation”.

News agency Reuters has done an extensive research in the matter and reported that next to Qatar Airways, four other airlines (Cathay Pacific, Finnair, Lufthansa and Singapore Airlines) also reported surface degration but that these airlines and their civil aviation authorities are also saying that these issues don't impact the safe operation of the aircraft and are purely cosmetic.

Despite this, Qatar Airways has said the relationship with Airbus has been completely destroyed and that they don't expect to be ever able to do business with them again. The airline has also filed a law-suit against the manufacturer in the UK High Court in which it seeks a 600 million USD compensation for damages. The first hearing in this matter is scheduled in April.

And now it seems Airbus taking the next step in the conflict with Qatar Airways by canceling their order for 50 A321neos, which were planned for delivery from 2023 onwards and were meant to replace the airline's current fleet of 29 A320s and three A321s. Reuters is reporting that it expects the airline will protest the decision by Airbus.

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.

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.

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.