Per the locking of the previous thread viewtopic.php?f=3&t=1463513, a new one can be created now that there are significant new updates.

Reuters & Bloomberg are now reporting that Airbus has revoked a separate with Qatar's for 50 A321neos. Also reported is the initial hearing in London is scheduled for the week of April 26th 2022.

"We confirm we did terminate the contract for 50 A321s with Qatar Airways in accordance with our rights," an Airbus spokesman said following a filing setting out provisional arguments, reported earlier by Bloomberg News.

Qatar Airways is expected to fight the A321 contract's termination, having said it plans to take delivery of the jets even though it is refusing to take more A350s until a dispute over surface erosion on the larger planes has been resolved.

The airline had no immediate comment on the A321 contract.

The Bloomberg article also mentions that Airbus agreed to compensate QR $175k/day for unscheduled groundings. Shortly after is when QCAA started grounding planes, Airbus alleging interference.

https://www.reuters.com/business/aerosp ... 022-01-20/
https://www.bloomberg.com/news/articles ... -grounding

I hope Airbus has factored in to this any leverage QR has from its shareholdings in IAG, CX etc.

This could get really complicated

Good call Airbus, lessors and airlines are hungry for those A321neo delivery slots, why save them for the bully.

JerseyFlyer wrote:

I hope Airbus has factored in to this any leverage QR has from its shareholdings in IAG, CX etc.

This could get really complicated

Does QR have majority of shares in IAG and CX? will the others shareholders be willing to participate in any kind of revenge?

Some underestimate the thirst of a composite plane. A350 would have been successful anyway without Qatar, just as much as 787 would have been even if ANA was not a launch customer. Airbus obviously is taking the angle that QR has it's own regulator that was willing to take Airbus to the woodshed.

Defaulting on two A350 deliveries was probably easy grounds for Airbus to terminate the A321 contract, and that would hold up in court.

Another bargaining chip IMO. I have to imagine that Airbus still wants QR to take their 350s and will reinstate the A321s if this goes away civilly

The blurb from Bloomberg also says Airbus has revoked the order for 1 out of 2 A350 which QR have refused to take deliver of.

Gar1G wrote:

The lack of any IAG 350 deliveries for quite some time might indicate that QRs influence is already taking effect (....)

I find it shocking given that without QRs 350 order, the program would not have been this successful. But I guess they are just ready to end this business relationship once and for all. Really quite sad

On the first point, the more logical reason would be the near-total collapse of intercontinental traffic, including the largest trans-Atlantic market. Which just happens to be the bread and butter of BA. Besides, I haven’t heard anything about BA refusing to take delivery. Agreed deferrals, yes, but not refusals like QR.

On the second point, QR placed a sizeable order for 75 copies of the A350, of which they’ve taken delivery of a little more than 50. The total order book for the A350, however, is approaching the 1000 mark. The QR order is not what has made the A350 successful, that is the basic qualities of the aircraft itself.

FlyHPN wrote:

Another bargaining chip IMO. I have to imagine that Airbus still wants QR to take their 350s and will reinstate the A321s if this goes away civilly

or maybe A lost patience with whimsical guy loaded with money coming from oil. For sure QR with only Boeing planes will turn to a marginal player.

Gar1G wrote:

JerseyFlyer wrote:

I hope Airbus has factored in to this any leverage QR has from its shareholdings in IAG, CX etc.

This could get really complicated

The lack of any IAG 350 deliveries for quite some time might indicate that QRs influence is already taking effect.

I do agree, the 350 is their main WB that could be on the line - unless they have another customer ready to pick up the orders and slots.

I find it shocking given that without QRs 350 order, the program would not have been this successful. But I guess they are just ready to end this business relationship once and for all. Really quite sad

QR has a 25% stake in IAG, with 2 directors on the board and was the cornerstone of the 2.7 billion pound capital increase during the height of the pandemic. IAG might as well be a subsidiary of QR group.

So if Airbus wants to permanently damage their relationship with QR, it could trickle into IAG in a very serious way. It may not necessarily mean IAG will stop doing business with airbus. But you may see IAG doing more business with Boeing. Bear in mind, every aircraft order has to approved by shareholders.

BUT what is 50 321s to airbus? They can sell it in like an hour

So they have cards to play

Kikko19 wrote:

FlyHPN wrote:

Another bargaining chip IMO. I have to imagine that Airbus still wants QR to take their 350s and will reinstate the A321s if this goes away civilly

or maybe A lost patience with whimsical guy loaded with money coming from oil. For sure QR with only Boeing planes will turn to a marginal player.

There is a third way if those charged with governance at QR take a view divergent from that of the CEO.

Kikko19 wrote:

FlyHPN wrote:

Another bargaining chip IMO. I have to imagine that Airbus still wants QR to take their 350s and will reinstate the A321s if this goes away civilly

or maybe A lost patience with whimsical guy loaded with money coming from oil. For sure QR with only Boeing planes will turn to a marginal player.

Why would they turn to a marginal player?

This dispute is between QR and Airbus. Even tho QR holds an 25% stake in IAG, it does NOT give them any control of any part of the airline group.

If this relationship is indeed beyond repair (and it does look that way) I'd be surprised if IAG's relationship is as badly damaged. Changing 4 airlines to all-Boeing (including EI and VY which are all-Airbus) would probably be too large an undertaking, but equally you could see Boeing edging ahead in business Airbus may otherwise have at least partly secured.

IB and BA's lack of A350 deliveries might be down to QR's influence, but can't guarantee that as 78Xs for BA have also been deferred. Might just be IAG doesn't want them yet. G-XWBI has been flying recently, at least.

Faury can be a tough guy too.
I would love to get to know John Leahy's comments on this.

Scotron12 wrote:

This dispute is between QR and Airbus. Even tho QR holds an 25% stake in IAG, it does NOT give them any control of any part of the airline group.

Of course not. It gives them influence

Like I said. It won’t stop IAG doing business with airbus. Of course not, they don’t have THAT much clout. BUT, you could see Boeing getting a bit more business than you may usually see them getting, I could easily see that happening. Assuming the relationship goes beyond repair

Opus99 wrote:

QR has a 25% stake in IAG, with 2 directors on the board and was the cornerstone of the 2.7 billion pound capital increase during the height of the pandemic. IAG might as well be a subsidiary of QR group.

Does a 25% holding give them a blocking vote under UK law?

just as a note the order consisted of this: "Qatar Airways has 40 Airbus A321neo jets on order, alongside ten of the extended-range A321neo LR models." https://www.executivetraveller.com/news ... nd-of-2022

Also, Airbus has other customers lined up like Northern pacific and maybe Icelandair that could pick up some of this order (20 each)

FlyHPN wrote:

The Bloomberg article also mentions that Airbus agreed to compensate QR $175k/day for unscheduled groundings. Shortly after is when QCAA started grounding planes, Airbus alleging interference.

The Bloomberg article is well written, however the magnitude of the compensation being sought by QR is higher than $175k, from the QR court filings

“ (b) The AOG Amount of USD 175,000 per each day was stated in January 2015 economic conditions and was to be escalated in accordance with the AOG Amount Revision Formula set out in Appendix A to Letter Agreement 1 of Amendment No. 8 to the A350 ASPA (Clause 3.2.2). As at the date hereof, the AOG Amount is USD 199,308 (2021).”

QR in their filings have claimed 8 different types of problems, they range from spider cracks, primer cracking underneath where the livery color intersects, oxidized ECF, rivet rash.

Rivet rash as it is known has been around for a long time, it is when the paint comes off the top of a fastener.

QRs court filings stated that Airbus had written to them detailing the methods these conditions develop

“ 16. Between around 2 February and 5 July 2021, the Defendant provided the Claimant with eight memoranda, each addressing one of the defects comprising the Condition. The memoranda provide some analysis of the causes of the defect, and in the case of the rivet rash, a hypothesis for the cause. However, none of the memoranda amounts to a valid root-cause analysis, and none identifies the root cause of the relevant defect.”

QR rejected the letters from Airbus because in its view they were not performed correctly, in their view

“ 17. In particular, the memoranda do not contain information which is necessary for any root-cause analysis, namely: (a) a requirements review; (b) a design criteria review; (c) a visual inspection analysis; (d) test programme review and data analysis; (e) a review of materials and process specification; (f) a review and critique of structural analysis; (g) recommendations for any additional testing or analysis; (h) a review of build and quality records; (i) a review of the aircraft flight and service history; and (j) an identifiable link between the results of the root-cause analysis and the proposed repair scheme.”

And they claim elsewhere in their filings they have no idea what investigators Airbus did with MSN36, yet they were aware that Airbus spent several months on their investigations.

They go onto say they cannot so the investigation themselves, because

“ 24. Further, the Claimant cannot conduct a full root-cause analysis alone. Such an analysis can only be carried out by, and/or with the assistance of, the Defendant because as the manufacturer and approved Design Authority, it has all the relevant data of the design, materials used and build of the QR A350 fleet and of the A350 more generally. By way of illustration, the Defendant fabricates the CFRP structure at various facilities globally. As such the Defendant is uniquely placed to review each of its facilities to ascertain whether any part of the procedure that was followed could compromise the integrity of the CFRP or ECF and cause one or more of the defects which make up the Condition.”

So Airbus in the documents have provided them with the details, they claim they do not have the ability to determine the details, and have rejected the details given to them by the manufacturer.

The court filing also paint a picture of collusion between the airline and the regulator.

“The QCAA suspended the Airworthiness Review Certificates in the following circumstances:

28.1 The Claimant observed that aircraft were suffering from defects comprising the Condition. The Claimant reported the extent of the damage to the QCAA, as its safety regulator. The Claimant was and remains concerned by the fact that: (a) the Defendant has not provided a root-cause analysis with the consequence that no satisfactory or permanent repair has been proposed to correct the root cause or to assess the impact of the Condition; and (b) the extent and scope of the accelerated surface degradation, i.e. the Condition, raises concerns about the potential impact of the Condition on safety and airworthiness of the Grounded Aircraft (those being the A350 aircraft with the most extensive damage caused by the Condition)“

The role of the QCAA is to make sure QR maintain their aircraft in accordance with the published procedures. They do not have a role in the certification of the airframe. If they have an issue with an airframes, the process under ICAO is to notify the state of design (ie EASA), and talk regulator to regulator.

The QCAA letters do not say that the aircraft were unairworthy, they said they “ (c) The QCAA therefore grounded the aircraft as a precautionary measure to prevent any untoward incident or accident caused by the Condition”

I am very pleased to see the A321s cancelled, if I owe someone money they are not going to sell me anything else until my account is settled.

Quotes taken from filings filed in Case No. HT-2021-000495 as filed in the HM Courts & Tribunals E-Filings.

JerseyFlyer wrote:

I hope Airbus has factored in to this any leverage QR has from its shareholdings in IAG, CX etc.

This could get really complicated

I would suggest that Airbus knows exactly what it is doing without having to consult a.net for anything.

MIflyer12 wrote:

Opus99 wrote:

QR has a 25% stake in IAG, with 2 directors on the board and was the cornerstone of the 2.7 billion pound capital increase during the height of the pandemic. IAG might as well be a subsidiary of QR group.

Does a 25% holding give them a blocking vote under UK law?

With IAG being registered in Spain, then Spanish law might take precedence.

Vicenza wrote:

JerseyFlyer wrote:

I hope Airbus has factored in to this any leverage QR has from its shareholdings in IAG, CX etc.

This could get really complicated

I would suggest that Airbus knows exactly what it is doing without having to consult a.net for anything.

LOL thank you for saying this!!!!! Needs to be said FAR more often

Boeing will have good margins on the coming orders from Qatar Airways.

And the winner will be Boeing. How can they not take advantage out of this?
But I do think this is a good move from Airbus in the current situation. I guess AB really played it so hard Airbus didn't have much other options.

I 'd humbly suggest that in a OEM-monopoly one OEM refusing to do business with an airline is a bigger headache for the airline than for the OEM, regardless of the size of the airline. Particularly if the one OEM still willing to do business with you has been practically unable to deliver widebody aircraft for quite some time because of quality issues / design flaws and you are known as the industry's most fussy pettifogger of all times. But there is, of course, always the Embraer 195E2 as your future backbone of the fleet..

vfw614 wrote:

I 'd humbly suggest that in a OEM-monopoly one OEM refusing to do business with an airline is a bigger headache for the airline than for the OEM, regardless of the size of the airline. Particularly if the one OEM still willing to do business with you has been practically unable to deliver widebody aircraft for quite some time because of quality issues / design flaws and you are known as the industry's most fussy pettifogger of all times. But there is, of course, always the Embraer 195E2 as your future backbone of the fleet..

Have to agree on that. Imagine there’s 2 vehicle dealers in town and 1 of them abjectly refuses to do business with you, and everyone knows it. Think the other guy is going to do his best to cut you a great deal?

There are many, many airlines that can and will buy Airbus. But on the other hand…not quite so many manufacturers for the airlines too buy from

MrHMSH wrote:

IB and BA's lack of A350 deliveries might be down to QR's influence, but can't guarantee that as 78Xs for BA have also been deferred. Might just be IAG doesn't want them yet. G-XWBI has been flying recently, at least.

Well right now nobody is taking 787s.

B777LRF wrote:

On the second point, QR placed a sizeable order for 75 copies of the A350, of which they’ve taken delivery of a little more than 50. The total order book for the A350, however, is approaching the 1000 mark. The QR order is not what has made the A350 successful, that is the basic qualities of the aircraft itself.

QR don’t own a lot of the A350 aircraft they operate, they are leased. The real harm going forward in my view will be the owners of these leased aircraft, and the future owners of the A321s that Airbus cancelled because of a reported default on A350 deliveries.

It is really the leasing companies that are paying the price for this, and they have the ability to move their aircraft to other carriers that are willing to maintain them.

I wouldn’t be surprised if the leasing companies already have a in principle deal in place to take the A321 delivers and place them elsewhere.

planewasted wrote:

Boeing will have good margins on the coming orders from Qatar Airways.

Like the A350s a lot of their other aircraft are not owned, I don’t see a situation where a leasing company is willing to pay higher airframe prices, why would you as a leasing company do this when the capital could be used for better returns elsewhere.

QR also have said they will never take another Charleston built 787 again, and that is where all 787s are built now as the line in WA was moved there.

QR order for 50 MC-21 incoming...

zeke wrote:

planewasted wrote:

Boeing will have good margins on the coming orders from Qatar Airways.

Like the A350s a lot of their other aircraft are not owned, I don’t see a situation where a leasing company is willing to pay higher airframe prices, why would you as a leasing company do this when the capital could be used for better returns elsewhere.

QR is ordering direct from the manufacturer though. The reason they don’t own most of their planes is they do post delivery sale-leaseback deals.

zeke wrote:

QR also have said they will never take another Charleston built 787 again, and that is where all 787s are built now as the line in WA was moved there.

Well Boeing has built at least one 789 at CHS for QR (LN 1109) so Qatar has clearly not told them they are halting all deliveries now that 787 is CHS only. Al Baker has frequently said one thing and then done the opposite. That is why he is called “U-Turn Al”. Remember when he wasn’t interested in the 777X (https://mobile.reuters.com/article/amp/ ... WO20131024)? He ordered it a month later.

FGITD wrote:

Have to agree on that. Imagine there’s 2 vehicle dealers in town and 1 of them abjectly refuses to do business with you, and everyone knows it. Think the other guy is going to do his best to cut you a great deal?

It's a two-way street. You get to tell your friends and neighbors that the car dealer sold you a car with bad paint and didn't offer a satisfactory repair which makes it harder for that dealer to sell cars.

I'm reading Leahy's book and he talks about how AA gave Airbus the cold shoulder for a decade plus over the A300 crash in NYC. US AIr did the same to Boeing over the 737 rudder issue. We already know of one program where Airbus could really use the kind of order QR can produce, and that's the A350F.

Like I said, it's a two-way street.

planewasted wrote:

Boeing will have good margins on the coming orders from Qatar Airways.

And good luck to them. Some customers are not worth keeping or acquiring.

QR may also like to consider the O'Leary factor, once you have pissed off one company in a duopoly your negotiating power does not improve, it greatly diminishes.

Polot wrote:

Well Boeing has built at least one 789 at CHS for QR (LN 1109) so Qatar has clearly not told them they are halting all deliveries now that 787 is CHS only.

I did not make that up, it was widely reported and previously discussed on here eg https://www.nytimes.com/2019/04/20/busi ... blems.html

zeke wrote:

Polot wrote:

Well Boeing has built at least one 789 at CHS for QR (LN 1109) so Qatar has clearly not told them they are halting all deliveries now that 787 is CHS only.

I did not make that up, it was widely reported and previously discussed on here eg https://www.nytimes.com/2019/04/20/busi ... blems.html

I never said you made it up. I wouldn’t treat his word as gospel though. His actions don’t always follow his words.

BoeingVista wrote:

planewasted wrote:

Boeing will have good margins on the coming orders from Qatar Airways.

And good luck to them. Some customers are not worth keeping or acquiring.

QR may also like to consider the O'Leary factor, once you have pissed off one company in a duopoly your negotiating power does not improve, it greatly diminishes.

Historically the OEMs have taken the view that maintaining customer relationships is more important that contact enforcement. The airline industry is cyclical and its helpful to know you have a partner that stands by you in good times and bad.

Polot wrote:

MrHMSH wrote:

IB and BA's lack of A350 deliveries might be down to QR's influence, but can't guarantee that as 78Xs for BA have also been deferred. Might just be IAG doesn't want them yet. G-XWBI has been flying recently, at least.

Well right now nobody is taking 787s.

That somehow slipped my mind, but I think BA's deferral may even predate the 787's current dilemma and the QR debacle. G-ZBLC first flew in 2020!

MrHMSH wrote:

Polot wrote:

MrHMSH wrote:

IB and BA's lack of A350 deliveries might be down to QR's influence, but can't guarantee that as 78Xs for BA have also been deferred. Might just be IAG doesn't want them yet. G-XWBI has been flying recently, at least.

Well right now nobody is taking 787s.

That somehow slipped my mind, but I think BA's deferral may even predate the 787's current dilemma and the QR debacle. G-ZBLC first flew in 2020!

BA was just about to take G-ZBLF before the delivery halt started. It was at the time when C, D and E were earmarked for re-work but Boeing could still deliver. They had BA crew doing acceptance flights and then the delivery halt came in.

Opus99 wrote:

MrHMSH wrote:

Polot wrote:

Well right now nobody is taking 787s.

That somehow slipped my mind, but I think BA's deferral may even predate the 787's current dilemma and the QR debacle. G-ZBLC first flew in 2020!

BA was just about to take G-ZBLF before the delivery halt started. It was at the time when C, D and E were earmarked for re-work but Boeing could still deliver. They had BA crew doing acceptance flights and then the delivery halt came in.

I see, that's me conflating issues then.

Revelation wrote:

FGITD wrote:

Have to agree on that. Imagine there’s 2 vehicle dealers in town and 1 of them abjectly refuses to do business with you, and everyone knows it. Think the other guy is going to do his best to cut you a great deal?

It's a two-way street. You get to tell your friends and neighbors that the car dealer sold you a car with bad paint and didn't offer a satisfactory repair which makes it harder for that dealer to sell cars.

I'm reading Leahy's book and he talks about how AA gave Airbus the cold shoulder for a decade plus over the A300 crash in NYC. US AIr did the same to Boeing over the 737 rudder issue. We already know of one program where Airbus could really use the kind of order QR can produce, and that's the A350F.

Like I said, it's a two-way street.

I see this a bit different. Say I buy a brand new car bring it in for the first service to the same garage where I bought the car. When I will pick up my car after service I realize there is a scratch lets say on a door. The dealer didn`t check the car before for any scratches. So I ask him to fix that for free plus some compensation. He agree and I ask him to paint the whole car for free. He agree again to satisfy me , his costumer. I ask myself how far he will go ? I tell him that I want a factory new car plus a hefty compensation because this is not new anymore.
Would you expect this dealer sell me any car in the future ? I guess not. The only thing I will see from him is a certain finger.
This is how I see the sitution between QR and Airbus at the moment. Who can live with this in a long term remains to be seen

so I guess this is getting revived

source: https://www.airguide.info/qatar-airways ... -and-a380/

Vicenza wrote:

MIflyer12 wrote:

Opus99 wrote:

QR has a 25% stake in IAG, with 2 directors on the board and was the cornerstone of the 2.7 billion pound capital increase during the height of the pandemic. IAG might as well be a subsidiary of QR group.

Does a 25% holding give them a blocking vote under UK law?

With IAG being registered in Spain, then Spanish law might take precedence.

Odd that Qatar would sue Airbus in a UK court, then.

https://www.forbes.com/sites/dominicdud ... f545982934

MIflyer12 wrote:

Vicenza wrote:

MIflyer12 wrote:

Does a 25% holding give them a blocking vote under UK law?

With IAG being registered in Spain, then Spanish law might take precedence.

Odd that Qatar would sue Airbus in a UK court, then.

https://www.forbes.com/sites/dominicdud ... f545982934

Because UK contract law forms the basis of the order contract between Airbus and Qatar, and lays out that the UK is the appropriate legal jurisdiction to deal with contract disputes. This is also why you sometimes see Airbus deliveries fly to UK airspace for official legal handover.

That doesn’t automatically mean UK law determines how IAG’s Board of Directors operate.

So a contract term that might be perfectly legal in say Qatar (or even France) but is not allowed under English law will be disregarded. Indeed it may mean the whole contract becomes unenforceable (as an aside I once signed a US based contract of employment for a UK based job. It has restrictive covenants which would be seen as a restraint of trade in England and would be unenforceable. This would have made the contract fail. Fortunately I never needed to test it).

So as a case in point under English law a penalty clause is unenforceable. What is allowed is a realistic expectation of damages for failure to perform as per the contract. So you cannot just say late delivery of the contract results in a penalty of $350,000 a month. Instead the wording would be around the impact of late delivery and the costs incurred.

As another aside this changed many road building scheme contracts in the Uk where say a bridge was being replaced. You cannot have a contract which has a penalty for late delivery or for lane closures. So the new contracts set a rental charge for impacting the normal service of the road such as closing a lane of said bridge at peak/standard/off peak running. Now contractors are very inventive to drive down those rental fees )and with it consumer impact.

So the precise wording of any contract term relating to compensation for frames being unavailable will be extremely important.

StTim wrote:

So a contract term that might be perfectly legal in say Qatar (or even France) but is not allowed under English law will be disregarded. Indeed it may mean the whole contract becomes unenforceable (as an aside I once signed a US based contract of employment for a UK based job. It has restrictive covenants which would be seen as a restraint of trade in England and would be unenforceable. This would have made the contract fail. Fortunately I never needed to test it).

So as a case in point under English law a penalty clause is unenforceable. What is allowed is a realistic expectation of damages for failure to perform as per the contract. So you cannot just say late delivery of the contract results in a penalty of $350,000 a month. Instead the wording would be around the impact of late delivery and the costs incurred.

As another aside this changed many road building scheme contracts in the Uk where say a bridge was being replaced. You cannot have a contract which has a penalty for late delivery or for lane closures. So the new contracts set a rental charge for impacting the normal service of the road such as closing a lane of said bridge at peak/standard/off peak running. Now contractors are very inventive to drive down those rental fees )and with it consumer impact.

So the precise wording of any contract term relating to compensation for frames being unavailable will be extremely important.

A contract would be drafted to be fully enforceable under English law.

Can't wait to see some of their 737 MAX 10 in Nepal in a couple of years!

zeke wrote:

QR also have said they will never take another Charleston built 787 again, and that is where all 787s are built now as the line in WA was moved there.

Do you have a quote from QR saying they will never take a Charleston built 787? This was claimed in a NY Times article and QR responded with a statement:

"Qatar Airways continues to be a long-term supporter of Boeing and has full confidence in all its aircraft and manufacturing facilities as a strong commitment to safety and quality is of the utmost importance to both our companies. We have over 100 Boeing aircraft in our fleet, manufactured in both Everett and Charleston”

https://weareboeingsc.com/new-york-time ... -carolina/

It feels like Airbus is finally walking away from an abusive relationship.

I hope Boeing takes full advantage of this with their 737 asking price when QR comes knocking.

Airbus must have confidence that they will prevail in the High Court to give up on an 50 plane order.

Whatever the outcome, win or lose, the relationship is broken. Can it be repaired? Depends.

So point counter point, Airbus say they are seeking legal advise, QR actually files a case, Airbus cancel an a/c order, QR does.......???
Article say Airbus cancelled per options in its contract, would QR have a similar claim to do the same to the remainder of the A350 order if the cancellation is related in any way to the current dispute?