Qatar Airways seeks more than $600 million in Airbus A350 dispute

·4 min read

By Tim Hepher and Guy Faulconbridge

PARIS/LONDON (Reuters) - Qatar Airways is seeking more than $600 million in compensation from Airbus over surface flaws on A350 jetliners, according to a court document shedding new light on an escalating business feud worth $4 million a day.

The Gulf carrier is also asking British judges to order France-based Airbus not to attempt to deliver any more of the jets until what it describes as a design defect has been fixed.

The two companies have been locked in a row for months over damage including blistered paint, cracked window frames or riveted areas and erosion of a layer of lightning protection.

Qatar Airways says its national regulator has ordered it to stop flying 21 out of its 53 A350 jets as problems appeared, prompting a bitter dispute with Airbus which has said that while it acknowledges technical problems, there is no safety issue.

Now, financial and technical details associated with the rare legal spat have emerged in a court filing at a High Court division in London, where Qatar Airways sued Airbus in December.

The Gulf airline is calling for $618 million in contractual compensation from Airbus over the partial grounding, plus $4 million for each day the 21 jets remain out of service.

The claim includes $76 million for one aircraft alone - a five-year-old A350 that was due to be re-painted in livery for the 2022 World Cup, which Qatar is hosting later this year.

That aircraft has been parked in France for a year needing 980 repair patches after the aborted paint job exposed gaps in the lightning shield, industry sources say.

The largest customer for Europe's premier long-haul jet claims Airbus failed to provide a valid root-cause analysis.

The jets feature a layer of copper mesh under the paint to prevent lightning - which strikes planes on average once a year - from damaging the carbon-composite fuselage, which is lighter but less conductive than traditional metal.

BREAKDOWN OF RELATIONS

Airbus said it understood the cause and would "deny in total" the airline's complaint. It has accused the airline, once one of its most highly courted customers, of trying to mischaracterize the problems as a safety concern.

"Airbus restates there is no airworthiness issue," a spokesperson said, adding this had been confirmed by European regulators.

Shares in the European planemaker closed down 1.5%.

Qatar Airways, which originally ordered a total of 80 A350s, had no immediate comment.

The airline has long had a reputation as a demanding buyer, sporadically rejecting deliveries for quality reasons.

But the 30-page complaint details an unusual collapse of relations between two of aviation's most powerful players.

The dispute widened in November when a Reuters investigation revealed at least five other airlines had discovered surface flaws, prompting Airbus to set up an internal task force and to explore a new anti-lightning design for future A350 planes.

Qatar is so far the only country to ground some of the jets.

Under aviation rules, the manufacturer's primary regulator - in this case the European Union Aviation Safety Agency (EASA) - oversees an aircraft's design. Regulators in nations across the world monitor local airlines and their individual aircraft.

The complaint detailed how the Qatar Civil Aviation Authority (QCAA) had withdrawn airworthiness approval for individual A350 planes in a series of letters from June 2021.

It said the QCAA had told the airline that the deterioration of airplanes was "disturbing, if not alarming." The regulator had also said it was "deeply concerned" that safety could be compromised because of a lack of analysis or permanent fix.

It is the first evidence of the stance of Qatar's regulator, which has not commented in public. Europe's EASA, by contrast, has said it has not yet found evidence of airworthiness issues.

Airbus has appeared to question the QCAA's independence from the state-owned airline, saying the decision to drag safety into a technical matter put at risk global safety protocols.

Qatar Airways Chief Executive Akbar Al Baker insisted in November that Qatar's regulator was driving safety decisions and that the row had caused a "serious dent" in operations.

The airline has started bringing mothballed A380s out of retirement as it prepares to cope with the soccer World Cup.

(Reporting by Tim Hepher in Paris and Guy Faulconbridge in London; Editing by Nick Zieminski and Matthew Lewis)

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