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Airbus scraps $6bn order for new aircraft from Qatar Airways

Airbus has scrapped a $6bn order for new aircraft from Qatar Airways in a rare move by an aircraft manufacturer amid an increasingly bitter row with one of its biggest customers.

The European plane maker confirmed on Friday that it had rescinded a contract for 50 of its popular A321neo aircraft by the Gulf carrier. Unilateral cancellations of orders by Airbus or its US rival Boeing are extremely unusual. In the few cases when it has happened, it has been because payment deadlines have not been met, or an airline has entered insolvency.

“Cancellations are remarkably unusual in this industry. Cancellations where the original equipment manufacturer initiates it are extremely unusual indeed,” said Sash Tusa, analyst at Agency Partners in London. It shows just how “toxic the relationship between Airbus and Qatar Airways has become”. 

Shares in Airbus were trading down 2.5 per cent on Friday afternoon at €113.

The move comes as the two companies are embroiled in a legal battle in London’s High Court over the quality of surface issues on Airbus’ A350 widebody aircraft.

Qatar last month announced it was suing Airbus over what it described as the “accelerated surface degradation” of the A350. The airline, which operates 34 A350-900s and 19 A350-1000s, has grounded 21 of its jets on the orders of its aviation regulator. It also has another 23 on order but has halted further deliveries during the dispute.

Akbar Al Baker, Qatar Airways’ outspoken chief executive, has waged an increasingly bitter campaign in public against Airbus over the surface problems.

The aerospace group has consistently maintained that the surface-degradation issues are non-structural, an assessment that has been backed by the EU Aviation Safety Agency.

Airbus has previously said that it had identified the root cause of the issue and that it was working with customers to provide solutions. Other A350 customers have identified similar, although less severe, issues, according to people familiar with the matter. No other airline has grounded their planes.

Qatar is seeking a resolution of the row in time for the World Cup that starts in November, added people close to the situation. The airline did not immediately respond to a request for comment on Friday.

The deal for the A321neos dates back to December 2017. It was advertised at the time as having a value, at list prices, of $6.3bn.

Demand from airlines for the Airbus family of A320 aircraft has been strong as the industry emerges from the coronavirus pandemic. The plane maker has moved to clean up its backlog of orders over the past 18 months. The company last year recorded 264 cancellations, of which the biggest single one was for 88 A320s from Norwegian Air.

 


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