Qatar Airways said it wasn’t obliged to accept deliveries of Airbus SE A350 jetliners until an issue with surface paint is fixed, accusing the European planemaker of lowering its standards in order to minimize the problem.
In a London court hearing on Thursday, Philip Shepherd, a lawyer representing the Gulf airline, said Airbus still hasn’t provided a required root-cause analysis of the paint-surface issues “because we suspect they don’t like what it means for this aircraft.”
“I’m asking them to perform the contract,” Shepherd said. “They are the monopoly supplier of A321, there is no other supplier and as such as a monopolist they owe a special duty not to abuse their monopolistic position.”
The court has told Airbus not to permanently hand over A321 production slots to other customers until the court determines whether to allow the cancellation—a move that shocked the industry, since it’s almost unheard of for a manufacturer to discard an order when a customer has the ability to pay.
The judge will consider the inconvenience to either side of canceling or reinstating the contract, as well as the uniqueness of the product on offer. Airbus has touted its A321 aircraft as a game-changer for airlines, allowing them to fly longer routes more economically.
At one point in the hearing, the judge asked Qatar Airways whether it had sought to lease A321s from aircraft lessors rather than purchase them directly. The airline’s lawyer said his clients had made inquiries but there was no availability, reiterating that the company would suffer extensive damage if the contract were canceled.
Threats
The judge questioned why the lack of availability wasn’t included in evidence, calling it “absolutely critical” to the hearing.
Airbus lawyers said the relationship had “seriously broken down,” and it would be wrong to force the parties together.
“It would be an extraordinary injunction that forced hostile parties to cooperate and Airbus to produce aircraft under the threat of contempt for almost a decade,” Sonia Tolaney said on behalf of Airbus in court.
The cost of Qatar obtaining aircraft in the leasing market can be addressed through damages, Airbus said, and the aircraft cannot be considered as unique because similar aircraft can be obtained either in the leasing market or by turning to Boeing’s competing 737 models.
Airbus said Boeing’s competitor models have “comparable if not better range” than what Qatar has ordered with Airbus.
The planemaker’s lawyer said that just 20% of the airline’s order are for the longer-range version of the A321, with a range of 6,500 nautical miles based on the configuration that the airline has chosen. Qatar said those models are the ones which are due to be delivered first, so are most relevant.
Another hearing on April 26 will set the timetable for the broader case on the A350 contract.