Airbus employees work in an assembly hall for the A321 at the Airbus plant in Hamburg-Finkenwerder, Germany.
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Airbus on Thursday upped the stakes in a dispute with one of its biggest customers, Qatar Airways, over grounded and undelivered A350 jets by announcing it had revoked a separate contract for 50 smaller A321s the airline needs to order to open new routes.
The move is expected to deepen a dispute that approached a rare courtroom clash on Thursday, with the week of March 26
Airbus has announced that it is withdrawing from the contract for A321neos in skeletal arguments made before a division of Britain’s High Court during a planning session on the A350 dispute on Thursday, people familiar with the matter said.
“We confirm that we have terminated the contract for 50 A321s with Qatar Airways in accordance with our rights,” an Airbus spokesman said after a filing with preliminary arguments previously reported by Bloomberg News.
Qatar Airways is expected to fight cancellation of the A321 contract after announcing it would take delivery of the jets, although it is refusing to take delivery of any more A350s until a dispute over surface erosion on the larger aircraft is resolved.
The airline initially did not comment on the A321 contract.
The A321 order stems from a contract that was first signed about 10 years ago and was valued at list prices at the time at US$4.6 billion. It was later modified to convert 10 of the A321s to a newer version.
Qatar Airways said the A321s would help launch flights into new markets where there is currently insufficient demand for larger aircraft but which are unattainable for smaller A320s.
The two companies have been jailed for months in a row over A350 damage including paint damage, cracked window frames or riveted patches and erosion of a lightning protection layer.
Qatar Airways says its national regulator ordered it to ground 21 of its 53 A350 jets when problems emerged, sparking a bitter dispute with Airbus, which said while it acknowledged technical problems there was no safety issue.
Qatar Airways is seeking $618 million in compensation for the 21 grounded jets plus $4 million a day as the dispute drags on.
The Gulf airline is also asking British judges to order France-based Airbus not to attempt to deliver any more jets until what it calls a design flaw is fixed.
Airbus has said it “rejects the complaint altogether” and has accused Qatar Airways, once one of its most courted customers, of falsely naming the issue as a safety concern.
It has indicated it will argue that state-owned Qatar Airways lobbied its regulator to ground the jets to seek compensation, while Qatar Airways has questioned the design and accused Airbus of not conducting studies have, the people said.
Qatar Airways has said its local regulator makes safety decisions independently and cannot assess the airworthiness of the affected jets without further analysis from Airbus.
The European Union Aviation Safety Agency, which is responsible for the overall design but not the locally regulated airworthiness of individual aircraft in service, said it had not identified any safety issues with any A350s it inspected.
Qatar is the only country so far to ground some of the jets.
However, a Reuters investigation in November found that at least five other airlines had discovered paint or surface defects since 2016, prompting Airbus to set up an internal task force ahead of the dispute in Qatar and investigate a new A350 lightning protection design.