Cross-Default Clause Honored in Favor of Airbus Amid Wider Court Case

Qatar Airways' hopes for a stay in their court battle went unanswered after a London judge threw out their request that would have required the manufacturer to hold onto their order for additional A321neo aircraft. 

The running court duel between Qatar Airways and Airbus, accusations and allegations have been running hot between the quarreling companies. As part of the greater tensions between them, Airbus had wanted to cancel outstanding orders for A321neos originally bound for the carrier, saying it was able to terminate the sale agreement because Qatar had recently refused delivery of A350s. Greatly in need of aircraft for the upcoming FIFA world cup, Qatar has been eager to get their hands on any aircraft they can, requesting the court place the deal on hold until the greater case is completed. 

No dice, unfortunately for them. Worse, the airline was ordered to pay the court costs for Airbus, or at least the portion covering the extent of the A321neo dispute. The court seems to have honored the cross-default clause in both order contracts, which allow Airbus to cancel either deal if the airline fails to uphold its end. Airbus argued that the carrier did not refuse A350 delivery solely out of concern for safety, as was their stated reason, but because they wanted to save money at the nadir of passenger travel. Qatar has insisted that the wear, cracking, and paint damage seen on its 2015-vintage A350s is premature, and that they were grounded by their civil regulator. Airbus has not shared that opinion, stating that the composite aircraft simply requires more frequent painting and upkeep than metallic predecessors. 

While the greater court games will continue to play out, Qatar is now left in a greater bind. It argued that the A321neo deal should be honored, as it could not obtain replacement aircraft on short notice, no matter if it went to the leasing market. There's nothing preventing the airline from approaching Airbus with hat in hand to place another order, but it can only be guessed how much tougher the negotiations could be at this point in time.

FMI: www.airbus.com, www.qatarairways.com