View Full Version : Airbus cancels Qatar A321 order
procede
21st Jan 2022, 07:49
In a surprise move, apparently Airbus has cancelled Qatars A321, supposedly due the A350 issues.
I am guessing Qatar was trying to push the order back and Airbus wants to use the slots for other customers (KLM and Transavia?). The A350 issues meant that customer relations were not going to get any worse anyway.
https://simpleflying.com/airbus-qatar-a321-order-revoked/
ATC Watcher
21st Jan 2022, 11:04
It is not difficult to determine who has the most to loose in this fight, I am sure there are very large financial interest behind Qatar airways, and I assume they will asses the long term consequences and .I would not be surprised if a solution is quietly found behind the scenes..
So where's the beef? The video by simpleflying in the linked article has pretty nasty looking pictures. It seems that a number of airlines have seen this problem, and that it can cause the anti-lighting metal mesh to be exposed or even compromised, also exposing the composite structure underneath to the elements. Airbus seems to be saying Quatar have been incorrectly characterizing this as a safety issue. So who's right on technical merits and what are Airbus doing to resolve this?
Noxegon
21st Jan 2022, 16:14
Meanwhile, I wonder if Qatar will be placing a C919 or perhaps a MC-21 order...
R6DXB
22nd Jan 2022, 17:18
M S not M C....C in Russian is for S...you are welcome
farefield
24th Jan 2022, 14:48
Headline "Macron throws his teddies out of his cot because someone cancels an order".
ElectroVlasic
29th Jan 2022, 04:37
The whole thing has been "tit for tat" up to now:
Airbus threatens "legal analysis"
Qatar files suite against Airbus
Airbus cancels A321 order
Qatar releases video of "accelerated surface degradation"
Now we see Qatar is about to drop an order for 50 (actually 15 new orders, and a mix of options and conversions of earlier orders) 777X Freighters. It's been something they've been telegraphing for a while. Last fall they were saying that the whole A350 surface degradation had ruled out ordering A350F, and in turn this may have been part of why Airbus went ahead and canceled the A321s but now Qatar is about to order 777X Freighter.
Link: https://www.bloomberg.com/news/articles/2022-01-28/boeing-poised-to-launch-777x-freighter-with-50-plane-qatar-deal
Commander Taco
1st Feb 2022, 03:13
As one might have expected:
Qatar orders Boeings (https://www.boeing.com/commercial/customers/qatar-airways/qatar-airways-order.page)
ATC Watcher
1st Feb 2022, 07:19
As one might have expected: Qatar orders Boeings (https://www.boeing.com/commercial/customers/qatar-airways/qatar-airways-order.page)
Good for Boeing and Airbus wish them good luck I would imagine . I wonder how Akbar will deal with the 787 issues, and if they are going to be as tolerant as the USAF is with Boeing on their KC-46.
ElectroVlasic
1st Feb 2022, 17:38
I wonder how Akbar will deal with the 787 issues
There's not much to wonder, is there? He has been working with Boeing on 787 issues all along as some QR frames are not delivered due to the "shim" issue.
Now he just made an order that Seattle Times estimates (after using industry valuations of discounts and also considering order conversions) still ends up to be $4B of new business for Boeing, so if he had concerns about 787 he has an odd way of showing it.
and if they are going to be as tolerant as the USAF is with Boeing on their KC-46.
Boeing has eaten the cost overruns of the original KC-46 R&D effort and most of the follow-on fixes except for the boom flexing issue that USAF admits was due to their improper specification of the requirement.
Perhaps if Airbus had found a way to manage their customer relationship like Boeing has, Airbus would have that $4B of business and a key early customer to provide lots of momentum for the A350F. Instead, Boeing now has a launch order for their competing 777X Freighter and a big MAX-10 commitment as well.
Like you said, good for Boeing and Airbus, wish them good luck, every KC-46 and A350 operator too.
Chris2303
1st Feb 2022, 18:12
Now he just made an order that Seattle Times estimates (after using industry valuations of discounts and also considering order conversions) still ends up to be $4B of new business for Boeing, so if he had concerns about 787 he has an odd way of showing it.
He needs airframes and Airbus say no so he has no choice but to go Boeing.
One wonders if, given Boeings current troubles, they will be able to deliver on time and on budget.
Indeed, they simply have no choice but to buy Boeings as Airbus will not be supplying Qatar Airways anymore.
ElectroVlasic
1st Feb 2022, 19:19
Indeed, they simply have no choice but to buy Boeings as Airbus will not be supplying Qatar Airways anymore.
Which suits Boeing quite well. They have $4B of new business, their first customer for the 777X Freighter signing up for 34 firm and 16 options, and a likely customer for the MAX-10 that they probably thought was always going to be an A321 customer.
Meanwhile Airbus has 4 firm A350F orders from a relatively small air cargo firm, ten from a major leasing firm, then letters of intent from AF and SQ that still haven't gone firm, and this is months after they had board authority to move forward on the program. They also have at least one customer mad at them, an expensive legal case to resolve in London, and some questions to answer about the lightning protection scheme on the A350, be it mesh or foil.
Overall, everyone involved will be fine, life will go on. Airbus is very well positioned in many ways. That doesn't mean it's unfair to look at the situation and see it from more than one perspective. Back in the 1990s Boeing treated several customers with arrogance (JetBlue and EasyJet come to mind) and later on that burned them. It'll be interesting to see where this situation ends up, but for now I think it is not as one-sided as some people suggest.
Some links:
https://boeing.mediaroom.com/2022-01-31-Boeing-Launches-777-8-Freighter-to-Serve-Growing-Demand-for-Cargo,-Enhanced-Environmental-Performance
https://www.qatarairways.com/en/press-releases/2022/january/Boeing777-8.html
https://simpleflying.com/airbus-a350f-orders-december-2021/
https://mentourpilot.com/a350-paint-problem-not-just-a-qatar-airways-issue/
Perhaps if Airbus had found a way to manage their customer relationship like Boeing has,.
That doesn't sit well for the customers expecting first their 737 Maxes, and then more recently their 787s, in the last few years. Some of course have been hit twice.
If Airbus have found Qatar just too difficult to deal with, ultimately you have to decide what to do. As any commercial person will tell you, there are periodic decisions you have to make where the situation just isn't commercially worthwhile any more. If you have a customer who is causing damage to your brand worldwide, then the loss of their orders can be the least worst option.
Bidule
2nd Feb 2022, 05:41
their first customer for the 777X Freighter signing up for 34 firm and 16 options
At the detriment of the 777X passenger aircraft, 20 of the 34 firm freighters being a conversion of passenger aircraft.
With regards to the 737Max10, it looks like only a MoU was signed for 25+25 (in total, same number as the cancelled 321s). A MoU is about nothing, it is to set up terms just in case...
.
At the detriment of the 777X passenger aircraft, 20 of the 34 firm freighters being a conversion of passenger aircraft.
With regards to the 737Max10, it looks like only a MoU was signed for 25+25 (in total, same number as the cancelled 321s). A MoU is about nothing, it is to set up terms just in case...
Indeed. As I understand it the actual number of aircraft ordered is ... 14.
It just wouldn't be possible for a professional carrier (and I certainly hope Qatar is) to place an order for the Max in the literally days since the A321 order was cancelled. A new type, particularly, needs a huge amount of financial and technical planning before actually placing an order. And while the Boeing sales team are doubtless very regular visitors to Doha, once you get into the detail it's different team members needed. Signing an MoU is really codeword for "starting discussions".
And of course, if you are a manufacturer of 777 seats, it's actually a loss !
ElectroVlasic
4th Feb 2022, 13:57
It's strange to read the assertions in this thread that Airbus will never sell airplanes to QR again, and that their new LOI for MAX is insignificant. Which is it? Is QR just going to stop buying airplanes forever because the mighty Airbus is angry with them? I don't think so.
As for the valuation of the deal, it does include the cancellations and does assume the LOI gets firmed, which IMO is a very fair assumption:
According to market pricing data from aircraft valuation firm Avitas, after typical industry discounts the 777-8F firm order minus the order for 20 of the passenger model, the 777-9X, is worth about $2.2 billion. For a marquee launch order announcement, it’s possible Qatar may have gotten an even larger discount.
The additional order for the 25 MAXs will be worth about $1.3 billion and the order for the two 777Fs another $330 million after standard discounts, according to Avitas estimates.
That means the total orders signed Monday add about $3.8 billion to Boeing’s order book.
Source is https://www.seattletimes.com/business/boeing-aerospace/boeing-launches-777fx-freighter-with-big-qatar-order/ ...
QR also has a bunch of aging 777 classic, A380 is scheduled for retirement, and presumably A350 is to be replaced at the most convenient opportunity (since Airbus won't do business with them, right?) so chances are good for follow on orders for 787 and 777X later in the decade, IMO.
Well, seems Airbus did it again. This time they cancelled the order of 2 A350-1000 for Qatar Airways.
https://www.reuters.com/article/airbus-qatar/airbus-revokes-order-for-two-a350-1000-jets-in-qatar-dispute-idUKL8N2UJ63C?edition-redirect=uk
Less Hair
8th Feb 2022, 16:59
Wow, this goes nuclear.
ATC Watcher
9th Feb 2022, 08:59
Whow indeed .. just wondering if the consequences of the current lack of electronic semi-conductors causing havoc in the car manufacturing industry ( up to 4 years waiting time if you order specific models today) and 6-8 months delays on previously ordered cars, is entering aircraft manufacturers .I was told an order contract a year ago for a Porsche 911 with delivery this summer would sell for tens of thousands of $ , and a recent second hand one is now more expensive than a new one.
Why deliver a previously ordered A350 to a very difficult customer you are going to lose anyway ,if you can cancel the order without penalties and sell that slot for more to a friendly airline ?
Not saying this what happened , but the idea crossed my mind.
It might be. I know the GA avionic industry is already complaining quite a bit about the chip shortage and impending if not current delivery bottlenecks. Usually aircraft manufacturer have quite long lead times, so they should, in theory, not as much affected, but who knows?
tdracer
9th Feb 2022, 18:30
Whow indeed .. just wondering if the consequences of the current lack of electronic semi-conductors causing havoc in the car manufacturing industry ( up to 4 years waiting time if you order specific models today) and 6-8 months delays on previously ordered cars, is entering aircraft manufacturers.
Possible but not likely. Due to the massive certification costs of new parts (the regulators have issued guidance that changing logic devices such as CPU or ASIC is a major change), and since aircraft avionics rarely use the latest state of the art components (since it costs so much to certify a change), the suppliers tend to stockpile logic devices.
Overall, regardless of how difficult a customer Qatar might be, it's pretty hard to see this as other than a win for Boeing.
It reminds me a bit of something that happened back in the 1990s. Boeing did a deal with (IIRC) Singapore for a bunch of 777s, agreeing to take used A340s as trade-in. Airbus came out and said they would refuse product support to Airbus aircraft that had been purchased through Boeing. Boeing responding by issuing a presser that Boeing would always continue to support any Boeing aircraft, regardless of who you bought it from. This made Airbus look so bad they quickly backed down :rolleyes:
It will be a win for Boeing of course, as there is no real alternative in a duopoly if one supplier does not supply a customer anymore. However, that will be quite costly for Qatar in the end, as Boeing has absolutely no incentive anymore to give big discounts, after all where is Qatar to get any alternative? By the way, Boeing did pull a similar trick at one point, by openly refusing to sell aircraft to a company which was then forced to completely switch over to Airbus over time. That airline does not exist anymore, but the cause of that is quite an unrelated story.
That said, with the current state of the game (https://www.statista.com/statistics/277047/key-figures-of-airbus-and-boeing/) (2020, 2021 (https://www.reuters.com/business/aerospace-defense/airbus-vs-boeing-orders-deliveries-2021-2022-01-11/)), Airbus can actually be quite relaxed about the whole thing. Not to mention that Boeing has no real answer to the A321 LR and XLR.
It reminds me a bit of something that happened back in the 1990s. Boeing did a deal with (IIRC) Singapore for a bunch of 777s, agreeing to take used A340s as trade-in. Airbus came out and said they would refuse product support to Airbus aircraft that had been purchased through Boeing.
In the spirit of accuracy here, they weren't trade-ins as the term is normally understood; they were not used at all, they were brand new aircraft not even built yet. Boeing wanted Airbus to deliver then whitetail, and was looking to market such brand new aircraft off the Airbus production line in direct competition to new Airbus aircraft, to established A340-300 customers. Singapore had got a particularly good deal on their price because they were ordered in a single deal in conjunction with other Airbus aircraft. I believe that Boeing have a comparable agreement with Ryanair, that for the good deal on their 737s they must not sell them off before, or at, delivery.
Maninthebar
10th Feb 2022, 15:16
In the spirit of accuracy here, they weren't trade-ins as the term is normally understood; they were not used at all, they were brand new aircraft not even built yet. Boeing wanted Airbus to deliver then whitetail, and was looking to market such brand new aircraft off the Airbus production line in direct competition to new Airbus aircraft, to established A340-300 customers. Singapore had got a particularly good deal on their price because they were ordered in a single deal in conjunction with other Airbus aircraft. I believe that Boeing have a comparable agreement with Ryanair, that for the good deal on their 737s they must not sell them off before, or at, delivery.
...implying that the depth of discount from 'list' for that deal is such that Ryanair could reasonably be expected to resell the frames for a profit to customers without the same buying power. More evidence that O'Leary had a barrel of significant size over which to suspend Boeing
jettison valve
20th Feb 2022, 10:07
WHBM,
Not correct according to my memory - Boeing indeed took over used SIA A340s, only two or three came directly out of TLS Into their hands.
Example: A340 MSN 117 (a “good friend of mine”), delivered to SIA 1996, transferred to Boeing around 2002
Yes, I am aware that Boeing bought the whole SIA A340 fleet, some had been in service for some years, others were still on order and Boeing was looking to sell these on "new, unused".
SpringHeeledJack
20th Feb 2022, 19:50
Yes, I am aware that Boeing bought the whole SIA A340 fleet, some had been in service for some years, others were still on order and Boeing was looking to sell these on "new, unused".
Didn't they all end up stored in Tarbes never to fly again ?
Airmann
21st Feb 2022, 02:07
Yes, I am aware that Boeing bought the whole SIA A340 fleet, some had been in service for some years, others were still on order and Boeing was looking to sell these on "new, unused". Two of SIAs 340s went to Gulf Air
In other news, the British court that will hear the case has ordered Airbus not to give away Qatar's 321 NEO slots until after the hearing. Apparently Qatar is still fighting the cancelation.
Commander Taco
21st Feb 2022, 02:54
Yes, I am aware that Boeing bought the whole SIA A340 fleet, some had been in service for some years, others were still on order and Boeing was looking to sell these on "new, unused".
If memory serves (it was after all, around 2007), Air Canada did a similar deal and managed to fob off its A340s in trade for the B777.
Rwy in Sight
21st Feb 2022, 16:33
Two of SIAs 340s went to Gulf Air
In other news, the British court that will hear the case has ordered Airbus not to give away Qatar's 321 NEO slots until after the hearing. Apparently Qatar is still fighting the cancelation.
I have flown in one of them. There is still a SIA logo in one of the toilets. How can a court oblige a seller to sell its products if the cancellation clauses are respected?
OvertHawk
22nd Feb 2022, 08:55
How can a court oblige a seller to sell its products if the cancellation clauses are respected?
Presumably the point of the case is that one party is claiming that the clauses have not been respected. In such a case it would not be uncommon for that party to ask the court to place a restriction on the other party to prevent them taking significant / irrevocable actions until after the case has been heard and the issue resolved