Uh Oh: Could Airbus Cancel Qatar Airways’ A350 Order?

A major legal dispute has been going on for several months. Today's court decision could have major implications, as the court could force the delivery of the A350s or it could allow the planes to be sold to other airlines.

The legal dispute between Qatar Airways & Airbus

A $600+ million legal dispute has been going on between the two airlines. The A350 fleet has been grounded by Qatar Airways because the fuselage surface is degrading at an accelerated rate. The issues have been argued that they are not real.

This has caused relations between the airline and aircraft manufacturer to sour significantly, and in January 2022, it was decided that the agreement to sell the A321neos would be terminated. There was a dispute about the legality of this.

A judge in the UK ordered the delay of the resale of the jets to other airlines. The decision was made in April 2022, that the jets could be sold to other airlines. There is a major update regarding the A350 dispute.

Airbus can terminate A350 contract with Qatar Airways, resell jets

It's not good news for Qatar Airways, as a UK judge has issued a further ruling in the case. The overall question of the safety of the A350 was given a major victory by the jury.

The new A350s will not be delivered by Qatar Airways because of safety concerns, but they have requested that the jets not be sold to other airlines. A judge's ruling today.

• Airbus is free to continue delivering these jets to Qatar Airways, triggering payment clauses
• If Qatar Airways refuses to take delivery of these jets, Airbus is free to resell these jets to other airlines

Many of the A350-1000s that are ready to be delivered to the Doha-based airline are on order. The existing A350 fleet consists of 34 A350-900s and 19 A350-1000s. Many of the planes are currently out of commission.

The judge said during the hearing that how much money is being spent on this legal battle is interesting.

“The costs for both sides are way over the top in my judgment. There is far too much time that is being spent here.”

Qatar Airways is entering uncharted territory

For all practical purposes, wide body aircraft manufacturing is a duopoly with only Boeing and Airbus. The airline will be stuck buying Boeing jets because of their relationship with Airbus.

I feel like the clock is running on this deal.

• Qatar Airways already had its A321neo order canceled on it, and Airbus could now cancel Qatar Airways’ remaining A350-1000s, which the airline is relying on to be able to continue to grow
• It’s not like Qatar Airways would have access to any comparable jets from Boeing immediately; the Boeing 777X won’t enter service until at least 2025, and Boeing 787 deliveries have been suspended for now, never mind that there’s a queue for getting these delivered
• If Qatar Airways can’t get more Airbus jets, the airline will quite literally be relying on leasing planes from other airlines to be able to grow, and that’s not ideal for an airline with a laser focus on a good guest experience

I'm not sure what to think of this dispute.

• I’m not sure what incentive Qatar Airways would have to make up this claim; the airline has the cash to pay for these jets and desperately wants to expand; leasing planes from other airlines is more costly than just buying these jets new
• At the same time, Qatar Airways is the only airline to report these problems, and Airbus has a good reputation for safety; I can’t imagine Airbus would be dismissing these claims if the aircraft manufacturer thought there was a real risk, as it would be terrible for Airbus’ reputation if something happened to one of these planes

It seems like taking delivery of the new A350-1000s would be a good way for the airlines to reconcile. The airline isn't having this surface issue with new jets, and hopefully the airlines can work toward a solution.

If the A350 order is canceled, there is no going back.

Bottom line

A judge today ruled that the Toulouse, France-based company can force Qatar Airways to take delivery of the A350s or sell them to other airlines. According to the claims of the airlines, the planes are degrading at an accelerated rate and they are refusing to take delivery of them.

I'm curious to see how this plays out. If the A350 order is canceled by Airbus, the carrier will have some major challenges with growth over the next few years.

Do you think the A350s will be delivered by Qatar Airways or not?