UPDATED: Airbus sics the lawyers on Qatar Airways

Qatar CEO says Airbus has 'destroyed' business relationship; Dispute over A350 problems and airline’s comments push European plane maker to unusually public reaction.

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(PHOTO: Qatar)

(Updates with comments from Qatar CEO)

In the 1991 movie Other People’s Money, star Danny DeVito plays a corporate raider who is threatened with legal action by the female lead of the film. He replies, “lawyers are like nuclear weapons…your side has them, my side has them, but when you use them they just screw everything up”. That sentiment is not stopping Airbus however, which announced recently that it was seeking an “independent legal assessment”, i.e., calling in the lawyers, to resolve what it calls an “ongoing mischaracterisation” of problems on models of the Airbus A350 that Qatar Airways has in service and which the CEO of Qatar, Akbar Al Baker, has complained of loudly.

Airbus said in a 9 December press release that it has been unable to settle the dispute “during direct and open discussions”. It did not name Qatar in that release, but confirmed to Reuters in a subsequent story that Qatar was the airline customer in question. Calling in the lawyers is relatively unheard of in the industry, much less publicising the fact that the action was taken. Airbus however, said in its statement that “safety is Airbus’ top priority. The surface paint-related findings have been thoroughly assessed by Airbus and confirmed by the European Aviation Safety Agency (EASA) as having no airworthiness impact on the A350 fleet”.

Qatar Airways Group Chief Executive Akbar Al Baker. (PHOTO: Qatar Airways)

The issue has been building since January and came to a head earlier this year when the airline took the drastic step of grounding the affected aircraft “to ensure the continued safety of all passengers”, which might have forced the hand of Airbus. Al Baker said in Boston at the annual general meeting of the International Air Transport Association that the issue was related to the paint that the aircraft had been delivered in and was deteriorating on composite areas where the aircraft experienced aerodynamic stress, leading to cracks in the composite structure. Reports earlier this year also said the issue includes planes at other airlines beyond Qatar. Finnair raised paint concerns as early as 2016 and reported in October 2019 that damage had spread below to the anti-lightning mesh. Cathay Pacific, Etihad, Lufthansa and Air France – acting in its capacity as maintenance provider for Air Caraibes – also complained of paint damage, according to reports.

Airbus though, is not backing down from Qatar. “While Airbus regrets the need to follow such a (legal) path, it has become necessary to defend its position and reputation. Airbus has worked actively with its customers in order to minimise the impact and any inconvenience caused by this in-service surface degradation on the aircraft. These solutions have all been dismissed by the above-mentioned customer without legitimate justification.”

Qatar officials declined to comment for this article. Airbus officials also declined to comment.

If the dispute is not resolved amicably, it could lead to costly litigation in which neither Qatar nor Airbus will really win, but the lawyers will certainly get paid – a lot. At stake for Airbus is continued to sales to Qatar, which has purchased hundreds of millions of dollars worth of planes from the European plane maker. Reuters reported that Qatar Airways is reluctant to implement short-term fixes without a full breakdown of the root cause.

UPDATE:
The CEO of Qatar Airways, Akbar Al Baker, isn’t letting the threat of lawyers deter him from lashing out at Airbus in their dispute over the A350. Baker was quoted in the South China Morning Post as saying the European plane maker has “destroyed” its business relationship with the carrier, adding, “with Airbus, the damage is very severe. I don’t know how we will be able to work with them again.” In response to what he termed Airbus’s “derogatory” remarks, Al Baker said he felt the need to correct the record lest the public misinterpret why a large number of brand new jets had to be grounded, the Post reported. He also called on Airbus to “come out and admit” there were manufacturing issues behind the problems, and to fix them itself.

“I hope that this condition doesn’t deteriorate further on the other airplanes that are already flying, some of which are already showing this condition starting to develop,” Al Baker said in the report. Al Baker said Qatar Airways was looking at how many aircraft it might have to lease to make up for the groundings. “At the moment we are looking at the number of aircraft that are grounded. We will have a cushion with additional aeroplanes just in case our regulator decides to pull the airworthiness review certificate of additional airplanes,” he said.

At least four Boeing 777s will come from Cathay Pacific, with Qatar keen to bring on additional triple-sevens from the Hong Kong carrier. Qatar Airways is Cathay’s third-largest shareholder, with a 9.99 percent stake.

Airbus had been in line to supply Qatar Airways with a new order of A350 freighter aircraft, but that looks unlikely to go ahead amid the ongoing row. “I was looking very positively at freighters. But they have destroyed that relationship,” Al Baker said in the Post report. “I don’t think that they will ever get a single size of order that we would have placed for the freighter…How would you expect me to ever do business again with a company that doesn’t care about the customer at all? It only cares about its financial statements and bottom line.”

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