Exclusive: Airbus axes remaining A350 jet deal with Qatar – sources

PARIS, Aug 3 (Reuters) – Airbus (AIR.PA) has revoked its entire outstanding order with Qatar Airways for A350 jets, halting all new jetliner business with the Gulf carrier in a new dramatic turn to a dispute clouding World Cup preparations, two industry sources have said.

No comment was immediately available from Airbus or Qatar Airways.

The two aviation titans have been waging a rare public battle for months over the battered condition of more than 20 long-haul planes which the airline says could pose a risk to passengers and which Airbus says are totally sure.

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Qatar Airways, which was the first airline to introduce the intercontinental jet to the skies in 2015, is suing Airbus for at least $1.4 billion after nearly half of its A350 fleet was grounded by the regulator of Qatar for premature surface damage.

He refused to take delivery of more A350s until he received a fuller explanation of the damaged or missing lightning mesh plates left exposed by peeling paint. Read more

Backed by European regulators, Airbus has acknowledged quality issues on the jets but denied any safety risk from gaps in the protective underlay, saying there is sufficient safeguard.

So far, the dispute has had a piecemeal effect on the order book for Europe’s largest twin-engine aircraft, as Airbus and then Qatar Airways terminated individual planes.

Now, however, Airbus has told the airline it is removing the rest of the A350 deal from its books, the sources said, asking not to be identified as the discussions remain confidential. Read more

At the end of June, the European aircraft manufacturer had outstanding orders from Qatar Airways for 19 of the largest version of the jet, the 350-passenger A350-1000, worth at least $7 billion at list prices or closer to $3 billion after typical industry rebates.

WORLD CUP

The sweeping cancellation of the new A350 comes six months after Airbus also terminated the entire contract for 50 small A321neo jets in retaliation for Qatar’s refusal to accept A350 deliveries.

The spillover to a different model has been called “worrying” by the head of a body representing global airlines, the International Air Transport Association. Read more

The latest move is likely to widen the rift between two of the flagship companies of close allies, France and Qatar.

Barring an elusive settlement, the dispute is already settled for a rare corporate trial in London next June. Read more

It comes as the airline industry grapples with an uneven recovery from the COVID-19 pandemic and Qatar Airways prepares to handle the bulk of the estimated 1.2 million visitors expected for the FIFA World Cup. FIFA in November and December.

Airbus has argued that the airline is using the dispute to bolster its finances and reduce its fleet of expensive long-haul aircraft as its long-haul target market slowly recovers.

Qatar Airways, which posted its first annual profit since 2017 in June, maintains it needs more capacity for the World Cup, forcing it to lease planes and roll out less efficient A380s to fill the void left by the grounded A350s.

The line focuses on whether the A350’s problems – including what appear to be damage to parts of the wings, tail and hull according to two jets seen by Reuters – stem from a problem cosmetic or, as the airline claims, a design flaw. Read more

A Reuters investigation in November found that several other airlines had seen surface damage since 2016, the A350’s second year of operation, prompting Airbus to speed up studies of an alternative mesh that also saves weight. Read more .

So far, however, none of the roughly three dozen other A350 operators have joined Qatar in raising concerns about safety due to surface flaws as they continue to fly the jet.

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Reporting by Tim Hepher; edited by Jason Neely, Kirsten Donovan

Our standards: The Thomson Reuters Trust Principles.

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