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Airbus revokes more plane orders in Qatar dispute

2/2 © Reuters. FILE PHOTO: A logo of Airbus is seen at the entrance of its factory in Blagnac near Toulouse, France, July 2, 2020. REUTERS/Benoit Tessier 2/2

PARIS (Reuters) -A $600 million contractual and safety dispute between Airbus and Qatar Airways deepened on Tuesday when the European planemaker revoked orders for two A350-1000 jets, days after ripping up an order from the Gulf carrier for 50 A321neos.

Qatar Airways has sued Airbus for more than $600 million and is refusing to take delivery of further A350s until its regulator receives a formal analysis of erosion to the painted surface and underlying lightning protection on 21 of the jets.

Airbus, which has two completed A350s ready for delivery to Qatar Airways, has said it has provided the necessary information on the problem of surface degradation and that the damage does not amount to a safety issue.

The planemaker said in a UK court filing last month that it was declaring Qatar Airways in default on two A350 jets that were completed and ready to be delivered.

It also took the unusual step of cancelling an order for 50 A321neo jets on the grounds that the alleged default on the larger planes had triggered a clause allowing it to revoke the order for A321neos, which are in high demand.

Qatar Airways last week ordered 25 competing Boeing (NYSE:BA) 737 MAX, plus options for another 25, as well as 34 new 777X freighters during a visit by the Gulf state’s ruling emir to Washington.

The airline has denied in legal arguments that it has broken its contract by refusing to take two A350s waiting on the tarmac in Toulouse. It also says Airbus is not entitled to claim a “cross-default” allowing it to cancel the A321neo deal.

An Airbus spokesman said on Tuesday the company had “terminated delivery positions for two A350s for Qatar Airways in full compliance with our rights”.

Qatar Airways had no immediate comment.

Airbus included the cancellations for 50 A321neos and two A350-1000s in a monthly summary for January, pushing it into negative territory with a net total of minus 16 orders for the first month of the year, after receiving 36 new orders.

The planemaker delivered 30 airplanes in January.

Airbus revokes more plane orders in Qatar dispute

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