EXCLUSIVE Airbus axles remaining A350 cope with Qatar Airways sources

PARIS, August 3 (Reuters) – Airbus. (AIR.PA) has canceled its entire outstanding order from Qatar Airways for A350s, ending all new jet business with the Gulf carrier, in a dramatic reversal of a dispute that has clouded preparations for the World Cup, two industry sources said.

There was no immediate comment from Airbus or Qatar Airways.

The two aviation titans have been waging a rare public battle for months over the condition of more than 20 long-haul planes that the airlines say could endanger passengers and that Airbus says are completely safe.

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Qatar Airways, which was the first airline in 2015 after delivering the intercontinental plane, sues Airbus for at least 1.4 billion.

It has refused to accept any more A350s until it gets a fuller explanation of the damaged or missing patches of lightning mesh left by peeling paint. read more

Airbus, backed by European regulators, acknowledged quality problems with the jets but denied any safety risks from gaps in the protective underlayment, saying there were enough spares.

So far, the dispute has had little impact on the order book for Europe’s largest twin-engine jet, with first Airbus and then Qatar Airways canceling some individual planes.

But Airbus has now told the airline it is taking the rest of the A350 deal off its books, the sources said, asking not to be identified because the discussions remain confidential. read more

In late June, the European planemaker ordered 19 of the largest versions of the plane, the 350-passenger A350-1000, worth at least $7 billion from Qatar Airways. USD at catalog prices or almost 3 billion.

Airbus shares were up 0.41% by 1401 GMT, halving their earlier gains.

THE WORLD CUP

The major new A350 cancellation comes six months after Airbus also canceled an entire contract for 50 smaller A321neo planes in retaliation for Qatar’s refusal to accept A350 deliveries.

The head of the International Air Transport Association, the organization representing the world’s airlines, called the transition to another model “disturbing”. read more

The latest move is likely to increase the rift between the two main close allies of the French and Qatari companies.

Despite the murky settlement, the dispute is already set for a rare corporate trial in London next June. read more

It comes as the airline industry grapples with an uneven recovery from the COVID-19 pandemic, with Qatar Airways preparing to take on the bulk of the roughly 1.2 million visitors expected in November and December. FIFA World Cup.

Airbus has said the airline is using the dispute to shore up its finances and reduce its fleet of expensive long-haul planes as its long-haul target market slows to recover.

Qatar Airways, which posted its first annual profit since 2017 in June, says it needs more capacity for the World Cup, forcing it to lease planes and deploy less efficient A380s to fill the gap left by grounded A350s.

The row centers on whether the A350’s problems, including parts of the wings, tail and fuselage damaged according to two jets spotted by Reuters, are due to a cosmetic problem or, as the airline claims, a structural defect. read more

A Reuters investigation in November revealed that several other airlines had found surface damage since 2016, the A350’s second year in service, prompting Airbus to accelerate research into an alternative mesh that also saves weight. Read more .

But none of the other roughly three dozen A350 operators have so far joined Qatar, which has raised safety concerns over surface defects as it continues to fly the jet.

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Reporting by Tim Hepher; Additional reporting by Alexander Cornwell; edited by Jason Neely, Kirsten Donovan

Our standards: Thomson Reuters Trust Principles.

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