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Posted On: 26 April 2022 04:15 pm
Updated On: 26 April 2022 05:24 pm

Airbus allowed to cancel Qatar Airways order for A321neo jets

ILQ Staff
ILQ Staff
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Qatar Airways plane

Reuters reported on 26 April, Tuesday, that a judge denied a request by Qatar Airways to force Airbus (AIR.PA) to keep building A321neo jets for the Gulf airline, in a setback to the carrier amid a wider airplane dispute that has triggered a major falling-out in UK courts.

The decision means the world's largest planemaker is free to market the in-demand jets to other airlines while the two sides pursue a separate dispute over the safety of larger A350 jets. Airbus revoked the A321neo deal in January in retaliation for Qatar's refusal to take A350s in their core dispute over damage to the painted protective layer of the larger jets.

The judge rejected Qatar's argument that it could not obtain similar aircraft to make up the shortfall in A321neo supply, for example by turning to the leasing market or by deploying 737 MAX jets that it has provisionally ordered from Boeing (BA.N).

The decision does not rule out Qatar reinstating the contract at a fuller trial but means that the cost of filling any gap between now and then can only be addressed by financial damages rather than forcing Airbus to build its customised jets.

As per Reuters, "Airbus says the two contracts are connected by a "cross-default" clause that allows it to pull the plug on one deal when an airline refuses to honour the other. It has accused Qatar Airways, the A350's biggest customer, of airing invalid safety concerns to avoid taking jets at a time of weak demand and to activate a $1 billion compensation claim."

Qatar says it was right to stop taking A350 deliveries over what it describes as genuine safety concerns by Doha's regulator over gaps or corrosion in a sub-layer of lightning protection left exposed by cratered paint on over 20 grounded A350s. It says the cross-default clause does not in any case apply."

Backed by European regulators, Airbus denies any A350 safety flaws, though it has acknowledged that paint peeling is a feature of modern carbon jets, requiring re-painting more often."

Qatar Airways was since ordered to pay most of Airbus' costs on the A321neo part of the case.


Source: Reuters (Reporting by Tim Hepher; Editing by Bernard Orr)
Cover image credit: Shutterstock