Resumption Of Cooperation Between Airbus And Qatar Airways
Aa
Share
Airbus has agreed to resume orders for nearly 75 aircraft from Qatar Airways.
Amicable and mutually acceptable settlement
Airbus and Qatar Airways said in a joint statement on Wednesday that they had reached an amicable and mutually acceptable settlement over the legal dispute. A long-running dispute over paint chipping on wide-body A350 models.
The cancelled orders for 23 undelivered A350s and 50 smaller A321neos have been restored under the new deal, which is also expected to see Airbus pay several hundred million dollars to the Gulf carrier.
Order cancellation
Airbus terminated a billion-dollar deal to supply Qatar Airways' 19 largest aircraft last summer, the latest escalation in a dispute between the European aircraft maker and one of its largest customers.
The company has canceled the remaining Qatar Airways orders for the A350 wide-body jet. The 19 aircraft are valued at around $7 billion at list price before the massive discounts aircraft manufacturers usually give to customers. This prompted Qatar Airways to initiate legal proceedings against Airbus in London, in which the airline sought compensation based partly on the impact of the inability to use the aircraft on its operations.
The news of the order cancellation comes after a similar move in January, when Airbus dropped a separate deal with Qatar Airways for 50 smaller A321 aircraft valued at $6.35bn before discounts. Qatar Airways CEO Akbar Al Baker, who gained a reputation for publicly chastising Airbus and rival Boeing over manufacturing issues, has signed an order for 25 Boeing 737 MAX 10 aircraft, a direct competitor to Airbus.
Paint problem
Qatar Airways said peeling and cracking paint on the wings of some A350 aircraft already in service has exposed copper mesh underneath, designed to protect against lightning strikes. The airline alleged in a London lawsuit that the paint issue was a safety risk.
Airbus has acknowledged the paint problem, but says it's just a cosmetic issue. The European Union Aviation Safety Agency, the European equivalent of the US Federal Aviation Administration, also refuted Qatari's claims that the case raised safety concerns.
The Conflict
The situation led to widespread conflict. In August, Airbus completed all new deals with Qatar Airways, canceling more than $13 billion worth of contracts, at the latest available list prices and ahead of the massive discounts aircraft manufacturers usually give to customers.
Airbus lawyers claimed that Qatar Airways exaggerated concerns about the issue by trying to claim compensation and refusing to provide an aircraft it did not need as the pandemic hit demand for air travel. The aircraft manufacturer has complained in court that the airline and its watchdog, the Qatari Civil Aviation Authority, failed to provide documentation showing the technical justification for grounding the aircraft.
The dispute with Qatar Airways has caused Airbus to look for new buyers for the jets that Gulf Airlines is not taking. Although the aircraft maker said it saw increased customer interest in ordering larger aircraft models, the resurgence in air travel this year was fueled by orders for smaller, short-haul aircraft.
Airbus share price
Airbus shares hit a pre-coronavirus high of 130.00 in late January, but then fell. In February they rise again but are below 120.00
Source: wsj.com, finance.yahoo.com
