Airbus Scraps Qatar Airways Jet Deal Amid Paint Spat
SE has scrapped a deal valued at billions of dollars to supply Qatar Airways with 19 of its largest aircraft, according to people familiar with the matter, the latest fallout in an escalating dispute between the European plane maker and one of its biggest customers.
The company has canceled Qatar Airways’ remaining orders for its A350 wide-body jet, the people said. The 19 aircraft are valued at roughly $7 billion at list price before the hefty discounts that plane makers typically give to customers.
The move, which ends all new business between the two companies, comes as the two sides are embroiled in a legal dispute over whether the degradation of paint on some jets represents a safety issue.
Qatar Airways has said that peeling and cracking paint on the wings of some A350s that it already operates has exposed copper mesh underneath designed to protect against lightning strikes. The airline has alleged in a London lawsuit that the paint issue is a safety risk. It has grounded about 20 affected aircraft, refused deliveries of more of the planes and is seeking financial compensation from Airbus.
Airbus has acknowledged the paint problem, but insists it is only a cosmetic issue. The European Union Aviation Safety Agency, Europe’s counterpart to the Federal Aviation Administration in the U.S., has also rebutted Qatar’s claims that the matter presents a safety concern.
News of the order cancellation, which was earlier reported by Reuters, follows a similar move in January, when Airbus abandoned a separate deal with Qatar Airways for 50 of its smaller A321 aircraft, valued at $6.35 billion before discounts. Qatar Airways Chief Executive
Akbar Al Baker,
who has built a reputation for publicly rebuking Airbus and rival
Boeing Co.
over production issues, last month signed an order for 25 of Boeing’s 737 MAX 10—the direct competitor to the Airbus model.
The airline, which has taken delivery of 53 A350s, was still set to receive an additional 19 in coming years.
Qatar Airways has alleged in a London lawsuit that peeling and cracking paint on the wings of some A350s is a safety risk.
Photo:
IMAD CREIDI/REUTERS
Qatar Airways’ decision to ground some of the planes leaves it without critical capacity as it prepares for a surge in travel to Doha for soccer’s 2022 FIFA World Cup, which starts in November. In response, the company has asked other airlines to help by operating more flights to the region.
The dispute with Qatar Airways has left Airbus seeking new buyers for the jets the Gulf airline isn’t taking. While the plane maker has said it is noticing added interest from customers over orders for bigger aircraft models, the resurgence in air travel this year has been led by orders for smaller short-haul aircraft.
Exacerbating the sales challenge is the highly customized cabin that Qatar Airways had ordered for its aircraft, according to one of the people familiar with the matter. That requires either a new buyer to take specially configured jets, or for Airbus to foot the bill for retrofitting those planes.
Write to Benjamin Katz at ben.katz@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
