UK judge rules against Qatar Airways in latest episode of $600m corporate divorce saga
A UK judge ruled today against Qatar Airways, in the latest episode of a bigger divorce battle between the airline and Airbus.
London’s High Court denied a request by the Doha-based carrier to force Airbus to keep building A321neo jets, after plane maker slashed Qatar Airways’ order for 50 planes in January.
The Toulouse-based plane maker acted in retaliation against Qatar Airways filing a $600m lawsuit against it over surface damage.
One of Airbus’s largest and most demanding customers, Qatar Airways started the corporate battle after it was forced to halt its A350 fleet as a result of surface issues.
The airline stopped taking A350 orders as Qatar’s aviation regulator found the paint defect was leaving lightning protection exposed. The airline’s decision is at the centre of a separate legal and safety dispute.
In court, Airbus argued revoking the A321neo was within its rights, as the two contracts are connected by a “cross-default” clause that allowed the plane manufacturer to slash one deal if the customer didn’t honour the other.
Airbus also accused the Doha-based carrier of coming up with false regulatory issues to avoid taking the A350 delivers at a time of weak demand as well as activating a $1bn compensation claim.
Airbus welcomed the court ruling, saying it was about the “misrepresentation on the safety and airworthiness of the A350, as as well as the reputation of its operators and the rules governing aviation safety in the face of unjustified claims.”
According to analysts, the ruling could have long-term consequences, marking a new era in the relations between manufacturers and their airline customers.
Before the feud, airlines always had a “reasonable level of buyer power” against Airbus and Boeing but the row has now showed plane makers are prepared to be more assertive when it comes to safeguarding their interests.
Compared with his predecessors, Airbus’s current chief executive Guillaume Faury often shrugged off the importance of the relationship, stressing the manufacturer’s right to defend itself.
“This is a world away from the usual hoops manufacturers would jump through to keep small disputes quiet, and resolve them quickly,” aviation analyst Alex Macheras told Morning Wire
In the future, forecasts predicted, relations between suppliers and buyers could become rebalanced, “as airlines have now seen manufacturers are prepared if necessary to take radical action to protect their wider interests.”