Friday, June 3, 2016

Qatar Airways Drops Airbus Order, May Consider Switching to Boeing 737

Qatar Airways, once the launch customer for the new A320neo from Airbus, has now cancelled its first delivery of the plane, citing delays due to problems with the Pratt & Whitney geared turbo-fan engines that have plagued the aircraft for months. According to airline CEO Akbar Al Baker, Qatar Airways should have had five A320neos in service by now.

Al Baker has floated two options. One is switching to the current version of the 737 from Boeing Co. and then converting to the 737 MAX when that aircraft becomes available. The other is switching its engine choice to a CFM International Leap-1A built by a joint venture between General Electric Co. and France’s Safran.

The airline’s agreement with Airbus contains a clause that permits Qatar Airways to cancel a delivery that is more than a specified number of days late. So far the airline has cancelled delivery of just one A320neo, but the remaining four that were to have been delivered by now also would be cancelled when they reach their time limits.

According to Al Baker, Airbus and P&W, a subsidiary of United Technologies Corp., have said the problems will be resolved soon, although some factors may not be fully addressed until the middle of next year.

Switching to a different engine or to Boeing would lead to further delivery delays and could be just a negotiating maneuver by Al Baker. A more timely solution may be for Qatar Airways to lease the planes it needs.

The A320neo is not the only problem Airbus is trying to work out with Qatar Airways. The planemaker is supposed to have received A350s by this time and a total of 10 this year. Supply problems for the aircraft’s seating have been a problem for at least a year. Al Baker said that Airbus told him that the first A350 delivery is now “imminent.”

(Paul Ausick - 24/7 Wall Street)

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