Unique: Airbus axes remaining A350 jet offers with Qatar Airways – sources

PARIS, August 3 (Reuters) – Airbus (AIR.PA) has revoked its entire outstanding order from Qatar Airways for A350 jets, severing all new jetliner business with the Gulf carrier in a dramatic new twist to a dispute surrounding World Cup preparations, two industry sources said.

No comment was immediately available from Airbus or Qatar Airways.

The two aviation titans have been engaged in a rare public battle for months over the scarred condition of more than 20 long-haul jets which the airline says could pose a risk to passengers and which Airbus insists are completely safe. .

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Qatar Airways, which was the first airline to take to the skies in 2015 with the intercontinental jet, is suing Airbus for at least $1.4 billion after the Qatari regulator grounded almost half of its A350 fleet due to damage before time for the surface.

He has refused to take delivery of more A350s until he gets a more in-depth explanation of damaged or missing patches of anti-lightning mesh left exposed by peeling paint. Read more

Backed by European regulators, Airbus has acknowledged quality problems with the jets but has denied any safety risk from gaps in the protective layer, saying there are enough back-ups.

So far, the dispute has had little impact on the order book for Europe’s largest twin-engine jet as first Airbus, then Qatar Airways, canceled several individual jets.

Now, however, Airbus has told the airline it is taking the rest of the A350 deal off its books, the sources said, asking not to be identified because talks are still confidential. Read more

At the end of June, the European airliner had outstanding orders from Qatar Airways for 19 of the largest version of the jet, the 350-passenger A350-1000, worth at least $7 billion at list prices or closer to $3 billion after typical industry discounts.

Airbus shares were up 0.41% at 1401 GMT, having halved earlier gains.

WORLD CUP

The latest cancellation of the A350 comes six months after Airbus revoked the entire contract for 50 smaller A321neo jets due to Qatar refusing to take A350 deliveries.

The head of the body representing world airlines, the International Air Transport Association, called the impact on another model “a matter of concern”. Read more

The latest move is likely to widen a rift between two of the key companies of France and Qatar’s close allies.

Barring an unacceptable settlement, the dispute has already been set for a rare corporate trial in London next June. Read more

It comes as the airline industry grapples with an uneven recovery from the COVID-19 pandemic and as Qatar Airways prepares to accommodate most of the estimated 1.2 million visitors expected for the World Cup FIFA in November and December to handle.

Airbus has argued that the airline is using the dispute to shore up its finances and reduce its fleet of expensive long-haul jets as its long-haul target market slowly recovers.

Qatar Airways, which made its first annual profit since 2017 in June, maintains it needs more capacity for the World Cup, forcing it to lease planes and retire less efficient A380s to fill a gap left by established A350s.

The series focuses on whether the A350’s problems – including what appeared to be damage to parts of the wings, tail and fuselage according to two jets seen by Reuters – are the result of a cosmetic issue or, as the airline claims, design flaw. Read more

A Reuters investigation in November revealed that several other airlines had found surface damage since 2016, the A350’s second year of operations, prompting Airbus to accelerate studies of another mesh that also saves weight. Read more.

So far, however, none of the roughly three dozen other operators of the A350 have come into Qatar to express safety concerns as a result of surface defects, as they continue to fly the jet.

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Reporting by Tim Hepher; Additional reporting by Alexander Cornwell; edited by Jason Neely, Kirsten Donovan

Our Standards: Thomson Reuters Trust Principles.

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