Airbus cleared to cancel Qatar Airways order for A321 jets in legal battle

aviation - April 27, 2022

Airbus has been given approval to cancel an order for its in-demand A321 single-aisle jets from Qatar Airways, giving the plane maker an incremental victory in a heated legal dispute with one of its biggest customers.

The Gulf airline had asked a London court for an injunction to stop Airbus from scrapping the contract for 50 planes. UK Justice David Waksman's decision to deny the motion clears Airbus to remarket the jets to other customers.

Qatar Airways, meanwhile, has suffered a setback in its high-profile battle with the world’s biggest plane maker. Airbus cancelled the A321 order in response to a larger court fight over alleged flaking paint on its A350 wide-body planes. The Qatari airline has refused to accept new deliveries of the larger jets since last year and is seeking compensation of $982 million.

Qatar Airways will now have to find other ways to meet its narrow-body needs. It will also have to pay £260,000 ($331,000) to Airbus in legal fees in the next 14 days.

Qatar is able to source alternative aircraft to make up for the shortfall in A321s” meant to be put into service during the fourth quarter of 2023, Mr Waksman said.

The judge said leased planes could likely supply Qatar Airways, and that if the airline wins the larger A350 case at trial, Airbus is capable of reinserting the airline into its A321 production plans.

Qatar Airways had sought an injunction to prevent the cancellation until a full trial over the A350 issues. If it wins the broader case, the airline will not have been in breach of the A350 contract by not accepting unsafe aircraft.

An Airbus statement said it was pleased with the decision and reiterated that it would defend the A350 against claims about its safety and airworthiness. Qatar Airways gave no immediate comment.

Airbus’s decision to pull the A321 order in January shocked the industry and showed how badly relations between the manufacturer based in Toulouse, France and one of its most important customers had soured.

Lawyers for Airbus said a cross-cancellation clause allowed the plane maker to scrap the A321 contract after the airline failed to accept delivery of A350s. Mr Waksman said he saw validity to this stance.

He rejected Airbus’s assertion that relations between the parties had broken down to such an extent it would be wrong to force them to work together.

The judge described the Qatar Airways argument that it needed the A321s to fly to new destinations such as Bilbao, Spain or Lyon, France was “flawed and uncertain” and in any case the routes could be served by other aircraft, he said.

With the verdict on the cancellation given, the court moved on Tuesday to discussing the timetable for the A350 case.

Qatar Airways is seeking a preliminary ruling on whether Airbus has conducted a full analysis of the problems with the A350s as required. It has asked the court to block Airbus from cancelling A350 orders and selling two of the wide-bodies it rejected for delivery to other customers.

Airbus wants the entire case to be moved directly to full trial.

One possibility is a renewed focus on settling both sides settling the dispute.

Airbus chief executive Guillaume Faury said in February that he would like to resolve the disagreement but the airline retorted that “neither Qatar Airways nor its legal team are aware of any efforts by Airbus to try to resolve the situation in an amicable way; in fact, the actual situation is to the contrary”.


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