Qatar Airways Refuses to Accept Over $1 Billion of New Aircraft

Jul 6, 2017

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Qatar Airways has been in the news a lot lately, from introducing a game-changing new business class product to being banned from flying to/through multiple neighboring Middle East countries. Now, Qatar is making waves again by refusing to accept over $1 billion of new Airbus A350 aircraft — which are reportedly already manufactured and fit for delivery to the airline.

When asked about the situation, Airbus noted that Qatar’s “A350 contract includes a clause allowing it to scrap handovers that are delayed beyond a certain point.” An Airbus spokesperson put the blame for the cancellations on “known supply chain issues” and the refused aircraft would “be reallocated” to other customers. However, it won’t come without cost. Reuters estimates that it “could cost Airbus $60-80 million to rip out and replace interiors.”

Records uncovered this week show that these four aircraft won’t be replaced by future aircraft coming off the manufacturing line. Qatar is simply canceling its order for these four planes, dropping its total order from 80 A350s (43 A350-900s and 37 of the A350-1000 model) down to 76 (39 and 37, respectively). This cancelation — and related spat between the two companies — is especially interesting as Qatar was the launch customer of the Airbus A350.

Before even getting to this point, Qatar has complained about manufacturing delays by Airbus, blaming these delays for preventing its expansion plans. So, it seems quite strange for an airline that seems so desperate to get more aircraft to now refuse four ready-for-delivery aircraft.

At this point, we can just speculate about the reasoning behind it. Is this a negotiation tactic for future Qatar orders from Airbus? Is Qatar reeling from the rift with its neighbors and would have no use for these aircraft now? Or, perhaps it’s a combination — Qatar is using a dip in Middle East demand to try to get preferential treatment from Airbus.

Qatar 777 Qsuite First Look
Or, maybe it’s QSuite-related?

Here’s a bit of our own speculation: perhaps this is just a delay tactic to avoid having to retrofit these A350-900s with the new QSuite business class product. At the QSuite unveiling at ITB Berlin, Qatar’s CEO Akbar Al Baker noted that Qatar’s Boeing 777s would be the first to be retrofit, followed by its A350-900s(all A350-1000s will be delivered from the factory with the new product). Perhaps Qatar doesn’t want to take delivery of these four new A350-900s with a business class product it knows that it’s going to yank out soon.

Why do you think Qatar refused to accept and then cancelled orders for these aircraft?

Chase Sapphire Preferred® Card

WELCOME OFFER: 80,000 Points

TPG'S BONUS VALUATION*: $1,650

CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners

*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.

Apply Now
More Things to Know
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
  • Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
  • With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
  • Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
Regular APR
15.99%-22.99% Variable
Annual Fee
$95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent/Good

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.