A few weeks ago, Airbus terminated its contract to sell Qatar Airways 50 Airbus 321neos. It looks like all hope may not be lost, and we could see this contract reinstated… maybe.
In this post:
Airbus ordered to delay Qatar Airways A321neo cancelation
Airbus and Qatar Airways have been involved in a $600+ million legal dispute, involving the Airbus A350. Specifically, Qatar Airways has grounded much of its A350 fleet, arguing that the fuselage surface is degrading at an accelerated rate. Airbus, meanwhile, has argued that these issues are cosmetic.
This has caused relations between the airline and aircraft manufacturer to sour significantly, to the point that Airbus decided to terminate its agreement to sell Qatar Airways A321neos. Airbus was able to do this because Qatar Airways refused to take delivery of A350s, putting Qatar Airways into default on new planes (according to Airbus).
A UK judge has now ordered Airbus to delay any practical impact of the decision to revoke the Airbus A321neo order. This prevents Airbus from allocating these early delivery slots to other airlines. Rather Airbus will have to wait at least until a court hearing takes place in early April, as Qatar Airways seeks an injunction to reinstate the contract.
This at least means that Qatar Airways’ A321neo order isn’t completely dead.
Will Airbus and Qatar Airways reconcile?
It seems increasingly likely that Airbus and Qatar Airways will reconcile here. Within the past few days, Airbus’ CEO has made it clear that the aircraft manufacturer is looking for an “amicable solution” with Qatar Airways, though stated that it will take time.
Furthermore, Airbus has at least started to acknowledge that the A350 is experiencing “surface degradation,” even though the company claims that it’s non-structural and doesn’t have safety implications. This is still progress compared to Airbus previously claiming that the paint is chipping.
It seems likely to me that Airbus and Qatar Airways will reconcile in the coming weeks:
- While there’s no indication that the court will necessarily rule in Qatar Airways’ favor in early April, this at least buys Qatar Airways several weeks to come to an agreement with Airbus, before the delivery slots are given to another airline
- Qatar Airways still has many A350s on order, so it seems easier for Airbus to once again develop a good relationship with Qatar Airways, rather than try to cut ties altogether
- Qatar Airways placed a Boeing 737 MAX order shortly after Airbus canceled the A321neo order, though it’s not a firm commitment yet, so I imagine Qatar Airways still has a way to get out of it
- The simple reality is that the A320neo family of aircraft is better than the Boeing 737 MAX family of aircraft in terms of range, comfort, etc.; with Qatar Airways’ narrow body fleet currently consisting of A320 family aircraft, it would also be much more efficient for the airline to maintain this
Bottom line
Qatar Airways and Airbus are engaged in a huge dispute. A few weeks ago Airbus canceled Qatar Airways’ A321neo order, which was a huge blow for the carrier’s short haul fleet plans. Qatar Airways is now trying to get a court to reinstate the order, and a judge has ordered Airbus to not allocate Qatar Airways’ delivery slots to other airlines until a hearing takes place in early April.
It seems likely that Qatar Airways and Airbus will be able to come to some sort of an agreement, especially as we’re hearing the narrative from Airbus executives shift ever so slowly. They’re open to reaching an amicable solution, and are at least admitting that there are more than just paint issues with the A350.
Do you think the Qatar Airways A321neo order will be reinstated, and the two companies will make up?
Please make your planes are safe x
Boeing as lost it’s way for many years now. It’s sad. America is starting to lose its way in the world. Greedy politicians and corporations are causing the down fall of this once great country oh don’t forget the unions too.
Well, it depends on the contractual wording. If there is no connection (e.g. cross default clause), it's very likely that the A321 contract will be reinstated, if QR has observed all clauses of this contract. However, there might be some clauses connecting the two contracts, which might lead to another result.
Anyhow, the judge's decision is only a preliminary one, meaning that Airbus cannot give a away the slots to other A321 customers, before a...
Well, it depends on the contractual wording. If there is no connection (e.g. cross default clause), it's very likely that the A321 contract will be reinstated, if QR has observed all clauses of this contract. However, there might be some clauses connecting the two contracts, which might lead to another result.
Anyhow, the judge's decision is only a preliminary one, meaning that Airbus cannot give a away the slots to other A321 customers, before a final verdict has been drawn. This is very common, but doesn't mean that QR will win ....
If I worked in a customer service industry I would definitely avoid a customer like Al baker. Cheap and grumpy, always unhappy yet doesn't mind lying when it is advantageous for him...I think he wanted to find some money from Airbus during the slow times and made this as a big drama.
I think most people , when reading the initial report believed that this was another business game that seems to always end in QR being the winner
Not sure I understand why a UK judge/court is arbitrating a dispute between a Qatari company and a European one????
In international civil law, it is very common to determine a place of jurisdiction other than the home countries of the respective contractual parties. My employer often uses Belgium - but only if the contractual partner is not a Belgium company. So I guess, they agreed on the UK when they drafted the contract.
Could it be the high temperature climate that accelerates surface degradation? Wondering how many other airlines are experiencing this. I can also see Qatar dumping the MAX order if they keep these A321s.
Nope. Because Delta, Lufthansa, Finnair, and several other airlines have been revealed to have various degrees of this degradation on their A350s... the difference is, none of their respective CAAs has determined the issue to be a safety hazard, and all of those airlines have been negotiating strategy with Airbus in private, like adults, versus attempting to use the media to bend the OEM to whatever their will may be.
The issues that Qatar has been complaining about are NOT "cosmetic" and are potentially catastrophic. Anyone who doubts that should look at the photos posted online.
Except that no other CAA agrees with you, and they knew the issues before clandestine youtube videos were posted.........
So what's your technical background that qualifies you say that by merely looking at the photos, there could potentially be "catastrophic" consequences?
Hmmmm, I thought not.....
anyone who has read the book Flying Blind knows Boeing engineering culture has been replaced by one of cash flows and political lobbying since the Condit and Stonecipher days. There has been no innovation there for a fw decades now with retrofits like the Dreamliner with its lithium battery fires and the MAX with its MCAS issues. Personally i would rather stick to Airbus aircraft now as their regulator has not been subsumed by the...
anyone who has read the book Flying Blind knows Boeing engineering culture has been replaced by one of cash flows and political lobbying since the Condit and Stonecipher days. There has been no innovation there for a fw decades now with retrofits like the Dreamliner with its lithium battery fires and the MAX with its MCAS issues. Personally i would rather stick to Airbus aircraft now as their regulator has not been subsumed by the manufacturer unlike the FAA/Boeing and their culture of not firing labor nor outsourcing ultimately leads to more investment in labor for higher productivity and greater sense of ownership. IMHO Boeing is a slowly melting ice cube
This article is about Airbus...
Airbus will concede & reinstate 32X deliveries prior to the World Cup. QR will get $ for cosmetic/any "defects" as well. With Beijing closed for the Olympics, the World Cup is now the biggest $ travel event of the '20's.
Even AA is going to Doha!
boeing : bruhhhhhhhhhhhhhh
Don’t know how much this actually changes anything as far as the relationship goes. Assuming the a321 neos were under a separate contract from the a350 order, I’d say this is just reigning airbus in from being able to retaliate on a contract that’s unrelated to the contract in actual legal controversy. QR has a need for narrow bodies and nearish-term delivery slots from either Airbus or Boeing are scarce. Could just be a purely...
Don’t know how much this actually changes anything as far as the relationship goes. Assuming the a321 neos were under a separate contract from the a350 order, I’d say this is just reigning airbus in from being able to retaliate on a contract that’s unrelated to the contract in actual legal controversy. QR has a need for narrow bodies and nearish-term delivery slots from either Airbus or Boeing are scarce. Could just be a purely practical thing and no great indicator of thawing relations. Plus there’s the angle of his excellency enjoying the prospect of compelling airbus to sell him the a321’s against its will. Remember this is the same guy who admits to launching a DOH-ATL flight for spite.
Way too much assumption, seeing as you have no idea what provision(s) would be written into the contract to grant a unilateral alternation/cancellation for either party. And no, an TRO pending injunction doesn't necessarily refute that.