Qatar Airways previously demanded $618 million in contractual compensation from airplane manufacturer.

Airplane manufacturer, Airbus, has terminated a contract with Qatar Airways for 50 smaller A321neo jets on Thursday as a months-long dispute between the two companies continues to escalate.

Citing people familiar with the matter, Bloomberg reported that the latest development came during a hearing at Britain’s High Court, where a further session over the ongoing A350 jet surface dispute is scheduled to take place in April.

“We confirm we did terminate the contract for 50 A321s with Qatar Airways in accordance with our rights,” said an Airbus spokesman.

Qatar Airways and Airbus have been going head-to-head since last year over the corrosion of a sub-layer of lightning protection on airplanes, with the latter maintaining  that the flaw does not pose a risk to A350’s safety.

Airbus described the flaw as a “surface paint” issue while the Qatari airline expressed concerns over problems beneath the paint, affecting the Expanded Copper Foil (ECF), which was used as a lightning-conductor, and the composite shell.

Qatar Airways seeks $618 mln from Airbus in escalating dispute

In turn, the flag carrier’s domestic regulator, the Qatar Civil Aviation Authority (QCAA), grounded 21 A350 aircrafts. The decision left Qatar Airways with an aircraft shortage as the total grounded jets represent 40% of its current fleet of A350s.

Responding to the lack of action from the plane manufacturer, Qatar Airways launched legal proceedings in December last year against Airbus at the High Court in London.

During the latest court hearing, Airbus claimed that Qatar Airways “sought to engineer or has acquiesced” in the groundings based on its economic interest as a result of the pandemic’s impact on demand.

The contract terminated by Airbus is separate from the initial dispute over A350’s. In 2011, Qatar Airways had placed an order for A320neos in a $6.35 billion deal.

Airbus’s decision to terminate its contract with Qatar Airways has been described as a “rare move” in the aviation industry and may be the first time an aircraft manufacturer cancels an order placed by an airline.

Qatar Airways is expected to fight Airbus’s decision as it continues to plan to receive the jets despite its dispute with the plane manufacturer over A350s. Its first A321neo was expected to be delivered in February 2023.

Bloomberg also noted that Airbus is expected to serve its defence to Judge David Waksman by 25 February.

Previous hearing

During the previous court hearing in London, Qatar Airways demanded $618 million in contractual compensation from the airplane manufacturer and asked.

The flag carrier also requested from British judges to prevent France-based Airbus from attempting to deliver more of its jets until it fixes the defects.

Furthermore, the airline is seeking an additional $4 million from Airbus for each day the jets remained grounded on top of the amount it demanded in contractual compensation.

Additionally, the legal claim included $76 million in compensation for a single, five-year-old aircraft parked in France for a year that was supposed to be repainted for the much-anticipated 2022 World Cup.

The Qatari airline is one of Airbus’ biggest customers, and was even the launch customer of the A350 model.

Moreover, Qatar Airways brought back part of its Airbus A380 fleet in November to meet passengers’ demands.

Follow Doha News on Twitter, Instagram, Facebook and Youtube