Qatar Airways has announced that they canceled the order for the first Airbus Group SE’s A320neo plane. Qatar Airways as the initial launch customer and the airline was scheduled to receive the first plane of that order last year. On Friday, Chief Executive Akbar Al Baker cited months of delays to the single-aisle plane promised have allowed Qatar Airways to invoke a contractual cancellation clause. Even more troubling, the Doha-based airline who is one of Airbus’s biggest supporter and champion could potentially walk away from more A320neo orders once they have triggered the remaining walkaway clauses.
Airbus and the plane’s engine maker United Technologies Corp. have had a myriad of issues resulting in being unable to get the A320neo up to the performance standards that is spelled out explicitly and contractually. This has led to significant delays and has elicited a response from Fabrice Bregier. The head of Airbus’s plane making unit has expressed his apologies and admitted he fully understands why the customers are unsatisfied though he declines to go into more details about the contractual issues at hand.
Under the original contract Qatar Airways should have five A320neos in service by now and Mr. Al Baker expressed his extreme displeasure citing the delays as “making a huge impact on my bottom line”. This is yet another incident in a long line of supplier bottlenecks that are undermining the commitments these plane makers have promised to their customers.
Airbus and Boeing have stumbled and failed to meet delivery dates and obligations due to aggressive ramp-up of productions spurred by huge orders. They failed to properly account for production delays and setbacks while taking in more orders than they could deliver. Airbus is taking assault on several fronts, as the newest long-range plane the A350 is running behind on schedule because of cabin interior component shortages in addition to the issues with the A320neo due to the concerns with engine performance.
Airbus believes that once hardware fixes are validated coupled with the new software upgrade to deal with spurious fault warnings, they would be able to deliver more of the A320neo planes. Qatar Airways is currently discussing buying the current version of the Boeing 737s and upgrading them to the 737 Max as a fall back option.
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