Qatar Airways was ordered to pay most of Airbus’s costs on the A321neo jets as part of the new case ruling.
Airbus can now cancel Qatar Airways’s order for its A321neo single-aisle jets, granting the plane manufacturer an interim victory in a dramatic legal dispute with one of its biggest customers.
The much anticipated decision on the ruling was finalised by UK court as it rejected the bid by the Gulf carrier to force Airbus to keep building its A321neo jetliners for the airline as part of a wider public row soaring up to one billion dollars.
Airbus won the support for its case, as the two contracts are connected by a ‘cross-default’ clause which allows it to ‘pull the plug on one deal when an airline refuses to honour the other,’ Reuters reported.
On April 7, Qatar Airways had asked a UK judge to further extend the temporary decision to ‘freeze’ Airbus cancellation decision. The first A321neo was set to be delivered in 2023.
The preliminary ruling by the British judge entails that the European planemaker is free to market its popular smaller jets to other airlines or remove them from industrial plans all together to relieve factory congestion, while the two sides remain locked in a separate disagreement over the safety of larger A350 jets.
Airbus said it “is pleased that this issue is now behind and that we can now focus on the main topic of misrepresentation by Qatar Airways of safety and airworthiness of the A350.”
The judge also denied the Gulf carrier’s argument that it could not find alternatives, such as leasing or deploying 737 MAX jets that it has provisionally ordered from Boeing Co, Reuters said.
The planemaker also expressed that it was pleased with the “court’s decision in recognising Airbus’s position that a transparent and trustful cooperation is essential in our industry.”
According to Reuters, Qatar Airways had no immediate comment, however a person familiar with the matter said the A321neo battle was “secondary to its safety concerns over A350 damage, which it blames on a design defect.”
Major dispute over A321neo jets
The legal row assumed a bigger stage when the plane manufacturer decided in January to revoke a six billion dollar deal for its best-selling model order of A321neo jets in retaliation for Qatar’s refusal to take A350s. It proclaimed ‘enough is enough’ after the public clash over A350 safety concerns.
This move prompted the carrier to present the case before the high court, claiming that the cancellation of the A321neo jet order was a breach of contract.
A lawyer for Airbus said a Boeing jet would be a fitting alternative, a statement which the airline noted was “at odds with the plane maker’s marketing pitch,” Reuters reported.
The move of officially canceling the order has reportedly ‘alarmed’ airlines and in general the airlines industry, with the International Air Transport Association calling the cancellation ‘worrying’, as Airbus leads the market for these jets.
According to Reuters, some airlines worry this may establish a precedent allowing disputes to ignite from one contract to another, ‘tightening the grip’ of plane giants, mainly Airbus and Boeing.
During the hearing on Tuesday, the two sides also discussed the logistics of a trial to be held as soon as early 2023.