It comes as Qatar Airways prepares to handle the majority of the 1.2 million visitors scheduled for the FIFA World Cup in November and December.
Airbus has cancelled its entire pending order from Qatar Airways for A350 planes, thereby ending all new airliner business with the Gulf carrier, two industry insiders told Reuters.
This comes as a major new development to a dispute that has been overshadowing the country’s ongoing World Cup preparations.
Airbus and Qatar Airways did not immediately respond to Reuters’ comment request.
For months, the two aviation titans have waged a highly publicised war over the damaged condition of more than 20 long-haul planes that the carrier claims might endanger passengers but Airbus believes are totally safe.
Qatar Airways, the first airline to fly the intercontinental jet in 2015, is suing Airbus for at least $1.4 billion after Qatar’s regulator grounded nearly half of its A350 fleet due to premature surface damage.
It has refused to accept any further A350s until it obtains a more detailed explanation of the damaged or missing portions of anti-lightning mesh exposed by peeling paint.
Airbus, backed by European authorities, admitted quality issues on the planes but disputed any safety danger from holes in the protective sub-layer, stating that there is adequate backup.
Until recently, the issue has had an effect on Europe’s largest twin-engined aircraft order book, with Airbus and Qatar Airways cancelling several individual jets.
However, Airbus has informed the airline that it would strike the remainder of the A350 agreement off its books, according to individuals who asked not to be identified.
At the end of June, the European plane maker still had 19 orders from Qatar Airways for the biggest model of the aircraft, the 350-passenger A350-1000, valued at least $7 billion at catalogue pricing or closer to $3 billion after customary industry reductions.
Airbus’ share price was up 0.41% at 14:01 GMT, halving earlier gains.
The massive new A350 cancellation comes six months after Airbus cancelled the entire agreement for 50 smaller A321neo planes in response to Qatar’s refusal to accept A350 deliveries.
The chairman of the International Air Transport Association, which represents global airlines, called the spillover to a new model “worrying.”
The new action is expected to exacerbate a schism between two of France’s and Qatar’s major firms.
If no settlement is reached, the case will be heard in a rare corporate trial in London next June.
It comes as the aviation sector struggles to recover from the Covid-19 pandemic, and as Qatar Airways prepares to handle the majority of the 1.2 million visitors scheduled for the FIFA World Cup in November and December.
Airbus has claimed that the issue is being used to boost its finances and shrink its fleet of expensive long-haul planes while its target long-haul market recovers slowly.
Qatar Airways, which reported its first annual profit since 2017 in June, believes that it requires additional capacity for the World Cup, requiring it to lease planes and pull less efficient A380s out of retirement to fill the void left by grounded A350s.
The dispute is around whether the A350’s issues, which appear to be damage to parts of the wings, tail, and hull according to two planes viewed by Reuters, are a cosmetic issue or, as the airline argues, a design flaw.