Airbus appears set to pop the bubble of perceived wisdom that the customer is always right, and antagonise one of its most high-profile clients, after moving to cancel a $6.3 billion Qatar Airways order for 50 A321neos.
The airframer is immersed in a legal wrangle over deteriorating fuselage skin-paint affecting several of the Qatari carrier’s A350s, but seems to have lost patience with the influential airline as a result of the drawn-out and highly public spat.
Airbus might wince a little at Qatar’s launch order for the Boeing 777-8 freighter – although whether the A350F was ever in contention, given the acrimony over the passenger aircraft, is hard to judge – but the airframer clearly thinks its gamble is worth taking.
Cancellation of the A321neos is something of a twist, given that the deal had its foundations in an earlier dispute between the two sides.
Qatar Airways had ordered 50 A320neo-family jets in 2011 and would have been the first carrier to take delivery of the re-engined model.
But technical issues with the Pratt & Whitney PW1100G engine led to delivery delays, and Qatar started refusing to accept the aircraft – with the result that the first A320neo was handed to Lufthansa in early 2016.
It walked away from four A320neo deliveries before reaching a revised agreement with Airbus to scrap the original deal and replace it, in December 2017, with the order for 50 A321neos – subsequently dropping the PW1100G engine and opting for the rival CFM International Leap-1A.
While Airbus has yet to elaborate on its rationale for terminating the A321neo order, Qatar Airways’ outspoken chief, Akbar Al Baker, has been less than diplomatic with his views on the airframer on several occasions, particularly during the platform of air shows.
Even as he prepared to sign for the 50 A320neos at Dubai in 2011, Al Baker was venting frustration over progress with a proposed A330 freighter conversion programme, and voicing displeasure at a redesign of the A350-1000.
Qatar Airways became involved in a row over its initial A380 deliveries in 2014, with Al Baker claiming the carrier was being “bullied” into taking aircraft it was not prepared to accept. The airline was the launch operator for the A350 and received its first later in the same year, but further friction – this time over acceptance issues with the twinjet – emerged in 2016.
This seemed to trigger a hardening of Airbus’s attitude. The airframer’s irritation became clear when then-chief Tom Enders publicly referred to the need for “some co-operation from demanding customers to take their aircraft”.
Qatar directly ordered 76 A350s, and has taken delivery of all 34 of the -900s included in the agreement. The larger -1000 model accounts for the other 42 aircraft, of which the airline has received 19.
Twenty-one Qatar A350s, a mix of -900s and -1000s, have been withdrawn from service, according to the carrier. Qatar is refusing to take any more A350s while the paint problems persist although the airline has hardly been open to deliveries from either Airbus or Boeing.
Al Baker chastised them both in 2020 and warned of potential litigation after suggesting the airframers were trying to coerce Qatar into taking jets even as global traffic collapsed. Qatar’s most recent Airbus delivery was an A350-1000 handed over on the last day of 2020.
The airline detailed the extent of the A350 skin-paint issue in mid-January this year, with video footage to back up its case, as it obtained an expedited UK court hearing set for April.
This video evidence appears to show skin damage on at least four A350-900s, registered A7-ALE, A7-ALF, A7-ALG and A7-ALT.
While three of these twinjets bore early serial numbers, MSN8, MSN11 and MSN13, and were delivered in 2015, the fourth is MSN90, a younger aircraft delivered in 2017.
“These defects are not superficial and one of the defects causes the aircraft’s lightning-protection system to be exposed and damaged,” the carrier says.
“Another defect leaves the underlying composite structure exposed to moisture and ultraviolet light, and other defects include cracking in the composite and damage around a high percentage of rivets on the aircraft fuselage.”
Airbus has previously countered that Qatar Airways rejected reasonable solutions to the problem, but the airline insists the manufacturer must undertake a thorough root-cause investigation, in order for the carrier to determine whether any proposed repair will rectify the condition.
“[We remain] prepared to help with the root-cause analysis,” the carrier adds. “In the meantime, we will continue to robustly defend our position in the legal proceedings.”
Qatar aims to force Airbus, through the court, to acknowledge and address its concerns, but Airbus argues that the issue has no effect on airworthiness and accuses the airline of misrepresenting the issue, to the detriment of Airbus’s reputation.
Airbus’s decision to “expand and escalate” the dispute by cancelling Qatar’s A321neo order is a “matter of considerable regret and frustration”, the airline says, pointing out that the agreement for these jets is an “entirely separate” matter.
“We confirm that we are adhering to all of our obligations under all applicable contracts,” insists the carrier.
As part of the 777-8F order the airline has tentatively signed for up to 50 737 Max 10s, without elaborating on whether this is a direct riposte to the A321neo cancellation.
Al Baker’s preparedness to be forthright and disruptive has been courted and encouraged in media circles, in a similar way to Ryanair chief Michael O’Leary’s entertaining unashamed taunting.
But Airbus has long signalled that it is not interested in securing O’Leary’s favour at any cost – one reason why Ryanair is struggling to convince Boeing to lower its Max 10 price – and Airbus appears to be steering a parallel course in its approach to Al Baker.
Wealthy Qatar is less likely to be fazed by aircraft pricing than Ryanair, but airline representatives are uneasy over the broader implications.
IATA director general Willie Walsh – who, as head of IAG, had close links with Al Baker – has expressed reservations about Airbus’s action, given the need for “healthy competition” between Airbus and Boeing.
“I would hate to think that one of the suppliers is taking advantage of their current market strength to exploit their position,” he says.
Qatar Airways had offered to serve as launch customer for a 777X freighter more than two years ago. Cementing of the $20 billion deal for the 777-8Fs marks a harmony, for the time being at least, between Al Baker and Boeing.
But the US airframer has not been immune to the casting of brickbats from Doha. Al Baker openly griped about delays to the introduction of the 787, and voiced frustrations when the type suffered early technical problems and when it was grounded over lithium-ion battery issues.
Boeing is still trying to clear a backlog of corrective work on 787s relating to manufacturing quality, but Al Baker – who still has 23 787s on order – recently dismissed this situation as being “dwarfed” by the A350 skin-paint saga.
With neither Airbus nor Qatar Airways ready to yield, the endgame will be played out in court. Regardless of the outcome, the balance of power between the airframer and one of the ‘Big Three’ Gulf carriers has shifted and the ripples might still be felt long after the verdict.