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Airbus Scrubs Remaining $6.74 Billion Qatar Airways A350 Jet Order in Latest Twist of Bitter Legal Battle

Airbus Scrubs Remaining $6.74 Billion Qatar Airways A350 Jet Order in Latest Twist of Bitter Legal Battle

European aircraft manufacturer Airbus has reportedly nixed a deal with Qatar Airways for 19 remaining A350-1000 aircraft worth an estimated $6.74 billion at list price.

The decision to abandon the deal with the Doha-based airline means that Airbus has scrubbed more than $12 billion in aircraft orders since a legal dispute erupted between the two sides over an alleged manufacturing issue with the A350.

Two sources quoted by Reuters claim Airbus has rescinded the agreement with Qatar Airways in a move that will allow the aerospace giant to resell the aircraft to other airlines. Deals are said to be in the pipeline with several potential customers including Tata-backed Air India.

In May, Airbus won the right to continue trying to deliver completed A350s to Qatar Airways while a legal dispute between the two is resolved in London’s High Court.

The decision paved the way for Airbus to claim that Qatar Airways had broken the agreement, allowing the manufacturer to sever the contract. Airbus used a similar argument to rescind a $6 billion deal for 50 brand new Airbus A321neo aircraft.

Earlier this month, Qatar Airways chief executive Akbar Al Baker signed a deal with Boeing for its rival 737MAX-10 aircraft.

Airbus and Qatar Airways have been locked in a fierce legal dispute since late last year when the Qatari flag carrier started to ground some of its A350 jets because of a paint defect that can cause large areas of paint to crack, bubble and peel away from the fuselage.

The issue is so severe that a special layer of lightning protection that coats the A350s fuselage is left unprotected. Qatar’s civil aviation regulator believes this poses a safety risk so serious that it warrants grounding affected aircraft.

But Airbus and the European Air Safety Agency (EASA) insist the issue is predominantly cosmetic and that while additional inspections are advisable, there is no reason to ground the aircraft.

In an effort to get Airbus to establish a root cause of the problem, Qatar Airways started legal proceedings in London. Airbus is fighting the claims but both sides cautiously suggest they are trying to find an out-of-court settlement to the dispute.

The full trial is not set to be heard until next summer.

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