Judge rules that Airbus will not have to build the A321neos for Qatar Airways, setting a worrying precedent.
Qatar Airways has suffered a setback in its court battle with Airbus. The Gulf airline had been chasing down orders for the A321neo, which were removed from the planemaker’s orderbook in retaliation for Qatar’s refusal to take delivery of its A350 widebodies.
According to reporting by Reuters, a court in London has ruled that Airbus does not have to continue building the planes for the airline. Airbus had argued that the two contracts – for the A350 and A321neo – were connected by a ‘cross default’ clause; this reportedly allows the manufacturer to pull the plug on one deal if the other is not honored.
Qatar, on the other hand, has claimed that it cannot fill the gap left by the lack of A321neos by any other means. That’s despite its provisional order for the 737 MAX. Although the judge has ruled in favor of Airbus, that doesn’t prevent Qatar from demanding a fuller trial down the line.
Qatar signalled its intention to take delivery of the 737 MAX at the same time as placing an order for the 777X freighter. Photo: Boeing.
What it does allow, however, is for Airbus to move other customers up the production queue, and to remarket the aircraft that had been destined for Qatar Airways. It sets a precedent that has never been seen in aviation before, where a problem with one contract can cause ripples through another. It’s symptomatic of the strength of the manufacturing duopoly, and could have consequences for future disputes.
What’s caused the issue?
The dispute has been ongoing for several months now, with the pair arriving in court at the start of this month. While the crux of the matter relates to paintwork issues on the Airbus A350, the court case hinges around Qatar’s order for the European planemaker’s flagship narrowbody, the A321neo.
Qatar first indicated its intention to purchase the A321neo in 2011, firming up that order in December 2017. Back then, it committed to purchase a total of 50 units from Airbus, all of the standard A321neo variety. A year later, it converted 10 of these 50 to the long-range A321LR variant, but was still some years away from taking delivery of the type.
Qatar was due to take 50 of the type. Photo: Airbus
Fast forward to more recent times, and the relationship between Qatar Airways and Airbus has gone decidedly sour. The airline complained of issues with the paintwork on its widebodies, refusing to take delivery of any more units and grounding several aircraft from the fleet, claiming its aviation authority believed the flaws to be a safety issue. Airbus has always maintained that the paintwork issue is not safety-critical.
The situation came to a head early this year when Qatar went public with exactly how bad the paintwork problem was. The airline released a damning video montage of at least three separate airframes showing paintwork so badly degraded that the lightning mesh was showing through beneath. Up until that point, the extent of the damage had been a closely guarded secret.https://www.youtube.com/embed/P4MRk6UXYOw
Airbus responded in kind by canceling the entirety of Qatar’s narrowbody order, as well as two of its future A350 production slots. At the time, Airbus told Simple Flying,
“Driven by the mandates of the legal process initiated by QTR, Airbus had to make the decision to exercise its legal rights and terminate two A350-1000 delivery slots and the A321neo contract. This decision came as a last resort and followed many fruitless attempts to find mutually beneficial solutions. Airbus remains committed to finding an amicable resolution but will, absent agreement by QTR to negotiate, continue to defend its case in court.”
Qatar had hoped that the court case would be ruled in its favor, forcing Airbus to supply it with the jets. That’s despite the airline having recently signed a significant order for next-generation narrowbodies from rival planemaker Boeing. Nevertheless, it seems that door is now closed, although Qatar may well appeal the decision.