UK judge rules against Qatar Airways in latest episode of $600m corporate divorce saga

A UK judge ruled today against Qatar Airways, in the latest episode of a bigger divorce battle between the airline and Airbus.

London’s High Court denied a request by the Doha-based carrier to force Airbus to keep building A321neo jets, after plane maker slashed Airways’ order for 50 planes in January.

The Toulouse-based plane maker acted in retaliation against Qatar Airways filing a $600m lawsuit against it over surface damage.

One of Airbus’s largest and most demanding customers, Qatar Airways started the corporate battle after it was forced to halt its A350 fleet as a result of paint issues on the surface of its planes.

The airline stopped taking A350 orders as Qatar’s aviation regulator found the paint defect was leaving lightning protection exposed.

In court, Airbus argued revoking the A321neo was within its rights, as the two contracts are connected by a “cross-default” clause that allows the plane manufacturer to slash one deal if the customer does not honour the other.

Airbus also accused the Doha-based carrier of coming up with false regulatory issues to avoid taking the A350 delivers at a time of weak demand as well as activating a $1bn compensation claim.

According to analysts, the ruling could have long-term consequences, marking a new era in the relations between manufacturers and their airline customers.

Before the feud, airlines always had a “reasonable level of buyer power” against Airbus and Boeing but the row has now showed plane makers are prepared to be more assertive when it comes to safeguarding their interests.

“In future, we may see a slight rebalancing of supplier and buyer power as other airlines have now seen that manufacturers like Airbus are prepared if necessary to take radical action to protect their wider interests,” David Warnock-Smith, professor of aviation management at Buckinghamshire New University, told City A.M.