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

Jul 6, 2017

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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?

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