Airbus Concerned About “Adverse Impact” Over Qatar Airways Suit

Airbus’ ongoing dispute with Qatar Airways has it worried about the impact on the company’s reputation as the court cases related to the A350s drag on. The plane maker has been at loggerheads with the Middle East carrier regarding the paint issues of the A350 aircraft. And in its latest financial statement, Airbus has warned its investors about the potential impact the dispute could have on its balance sheet.

Airbus concerned

A report by City A.M. cites Airbus’ latest financial statement, which talks about the implications its feud with Qatar Airways could have. Indeed, the document released by the European aircraft manufacturer does state the concern.

Airbus mentions Qatar filing a court case in December last year citing surface degradation on some of its A350 fleet and alleging an underlying “design defect.” It goes on to list the claims the airline is seeking, which include:

1. Liquidated damages for aircraft grounded by the Qatar Civil Aviation Authority
2. An order that Airbus must deliver a full root cause analysis for surface degradation issues
3. A declaration by the court that Airbus may not deliver any further A350 aircraft to Qatar Airways until alleged “design defects” are cured.

Photo: Airbus

Airbus, of course, has rejected Qatar’s claims, terming them as “mischaracterisation of the non-structural surface degradation.”

But it is concerned about the impact of the trials that begin next year. The plane maker said,

“The consequences of such litigation and the outcome of the proceedings cannot be fully assessed at this stage, but any judgment or decision unfavorable to the Company could have a material adverse impact on the Financial Statements, business, and operations of the Company as well as its reputation.”

Feud continues

Meanwhile, the tension between Airbus and Qatar Airways continues to increase with new developments in the long saga of the A350 dispute. In September, Airbus confirmed that it had revoked all remaining A350 orders from Qatar Airways. The airline has 19 outstanding A350-1000 orders.

Photo: Vincenzo Pace | Simple Flying

The cancelation was revealed after Airbus released its monthly data, which showed that it had scrapped Qatar’s remaining A350-1000 unfilled order. Many of these planes have been assembled and taken their first flights but are currently stored in Toulouse.

Earlier this month, even Boeing found itself dragged into the dispute, with Airbus wanting to see Qatar’s Boeing 737 MAX contract. Given the sensitive nature of the contract, Boeing, too, sent its lawyers to defend its position and avoid disclosing pricing information.