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Qatar Airways And Airbus Settle Bitter Conflict Over A350 Jets
(CTN NEWS) – PARIS – Following a ferocious 18-month conflict that tore the top off the global jet market, Airbus and Qatar Airways announced on Wednesday that their disagreement regarding the A350 aircraft that had been grounded had been resolved.
This avoided a potentially catastrophic UK court trial.
A $2 billion dispute about surface damage to long-haul jets is resolved by an “amicable and mutually satisfactory settlement.”
Airbus withdrew billion-dollar plane deals due to the conflict, and Qatar increased its purchases from Boeing.
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Under the current agreement, the 23 unfulfilled A350s and 50 smaller A321neo orders that were canceled have been reinstated.
And Airbus is also anticipated to pay the Gulf carrier several hundred million dollars while forgoing additional claims.
Financial information was kept private.
According to the businesses, neither admitted fault. Both promised to renounce their grievances and “go ahead and work together as partners.”
The agreement ended an extraordinary public divorce trial between titans of the $150 billion jet industry, typically close-knit and shrouded in secrecy.
Before the June trial, the two parties had amassed claims and counterclaims totaling roughly $2 billion.
Surface damage seen on Qatar Airways’ airbus A350 parked at Qatar airways aircraft maintenance hangar in Doha, Qatar, June 20, 2022. REUTERS/Imad Creidi
The purchase, which followed growing political participation amid close connections between France, where Airbus is based, and Qatar, was praised by French Finance Minister Bruno Le Maire.
“It is the result of extensive collaboration. Good news has arrived for the French aerospace sector, “said he.
Before the announcement, Airbus shares finished up 1%.
After paint cracks revealed holes in a sub-layer of lightning protection on its latest generation of A350 carbon-composite aircraft, Qatar Airways took the extraordinary step of openly suing the world’s largest aircraft manufacturer over safety.
Despite acknowledging quality issues, Airbus argued that the aircraft was safe, supported by European regulators, and accused the airline of misrepresenting issues to obtain compensation.
A view shows the Qatar Airways’ airbus A350 parked outside Qatar Airways maintenance hangar in Doha, Qatar, June 20, 2022. REUTERS/Imad Creidi
DAMAGES
Both sides, supported by an expanding army of attorneys, sparred over document access at preliminary hearings, to the increasing annoyance of the judge, who was eventually obliged to order cooperation.
Analysts predicted that the settlement would give both parties a sense of vindication:
Qatar Airways would receive damages and acknowledgment that the manual did not cover the issue and needed a new repair.
And Airbus would maintain its stance on safety and avoid having to find a new home for its canceled A350 aircraft.
Qatar will finally receive the in-demand A321neos it needs to plan its growth in 2026, though three years later than anticipated.
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Separate from the contentious A350 contract, IATA, the international association of airlines, had criticised Airbus’ decision to cancel the order.
Although some experts wonder if it could have reached the earlier schedule due to supply issues, Airbus claimed it had done its best to avoid moving Qatar too far back in the line.
The agreement is also anticipated to end a claim for compensation for grounding accruing $6 million per day due to a condition enacted after repainting a plane for the World Cup showed major surface damage.
According to court documents, Airbus’ theoretical liability, initially estimated at $200,000 a day per plane, had increased to a total of $250,000 per hour for 30 jets, or $2 billion annually, by the time the deal was reached.
On the specifics of the deal, neither party spoke.
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Airbus said it would now collaborate with the airline and authorities to provide the necessary “repair solution” and get Qatar’s 30 grounded jets back in the air.
A settlement was officially announced after Reuters said one would be reached as soon as Wednesday.
Other airlines were found to have experienced A350 skin degradation in 2021, despite all of them claiming it was only “cosmetic,” according to a Reuters investigation.
The controversy has drawn attention to the design of contemporary carbon-fiber jets, which do not interact with paint as smoothly as conventional metal ones do, and has illuminated industry practices.
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