Bloomberg News

Qatar Air CEO Ridicules Airbus After Shelving Aircraft Order

November 15, 2011

(Updates with reaction from Airbus in fifth paragraph.)

Nov. 15 (Bloomberg) -- Qatar Airways Ltd. Chief Executive Officer Akbar Al Baker ridiculed Airbus SAS after walking away from aircraft purchases at the Dubai Air show, saying the manufacturer is “still learning how to build airplanes.”

Al Baker said he had planned to make a “very large” announcement today with Airbus, the industry leader in the civil aviation industry. Minutes earlier, Airbus was forced to abort a press conference, saying the deal was “too hot” to be signed on time. Al Baker declined to give a reason for the hold-up, saying only price isn’t necessarily the sticking point.

“We have reached an impasse with them,” Al Baker told the conference when asked why the Airbus deal fell through. “We thought we would conclude an agreement. Airbus is still learning how to make airplanes.”

The Qatar Air CEO, who markets his airline as a five-star luxury carrier, has built a reputation for riling aircraft manufacturers, slamming them for what he considers sub-par products and delays. Boeing Co. was forced to postpone the inaugural delivery in September of its jumbo 747-8 freighter to Cargolux Airlines International SA, in which Qatar Air holds a 35 percent stake, after Al Baker said the jet didn’t meet fuel- efficiency guarantees.

“Some people negotiate in the press, some negotiate in conference rooms, and some do both,” Airbus Chief Operating Officer John Leahy said at another signing ceremony at the show. Asked about Al Baker’s accusation that Airbus needs to learn how to build aircraft, he said “we learn very fast.”

Ups and Downs

Qatar Airways and Boeing have overcome their differences, Al Baker said today, adding that “friends always have ups and downs in relationships, but it doesn’t mean you end your relationship.”

The Middle East carrier is the first customer to take the Airbus A350-900 wide-body aircraft, which Airbus is in the process of manufacturing. The company said last week that entry into service would slip to the first half of 2014, a delay Al Baker said today is “insignificant” on civil jet programs.

However, the company would not accept any additional delay on the new wide-body aircraft, as Qatar has used up its buffer on the A350, he said. Al Baker said he’s “not happy” with the design changes on the larger A350-1000 variant, which Airbus announced four months ago at the Paris Air show and which aims to add more thrust.

‘Pessimistic’

Al Baker said he’s “pessimistic” that he will be able to announce an accord with Airbus at the Dubai Air show, which wraps up tomorrow. Any deal would be “the icing on the cake” for the show, he said.

Airbus was exposed to public humiliation at the hand of Qatar Air as the airline leverages its clout as a growing global carrier. Qatar Airways doubled its fleet from 51 all-Airbus aircraft flying to 70 destinations in 2006, and now serves 109 destinations across Europe, Middle East, Africa, Asia, Australia, North America and South America. The carrier has orders for more than 200 jets valued in excess of $40 billion.

Boeing has so far dominated the Dubai show, winning its biggest order in history from Emirates, for 50 777-300ER wide- body aircraft, as well as options for 20 more. Al Baker urged Boeing to upgrade its 777, the company’s best-selling jet, and Qatar Air would consider a “large” number of an improved variant.

Insignificant Delay

Qatar has ordered 20 of the largest A350 variant, 40 of the mid-sized version and 20 of the shortest member of the family. The airline has an agreement with Airbus to cover the delay on the A350-900, Al Baker said, after Airbus announced last week the hold-up would lead to a 200 million-euro charge.

“Everyone knows that Qatar Airways will not wait indefinitely,” Al Baker said if the A350 model. “Six months for a new program is insignificant but further delays will concern us.”

The airline CEO slammed Airbus as he announced that Qatar Air will buy two additional Boeing Co. 777 freighter aircraft, which Al Baker said is the “best freighter aircraft” in the world today. Still, his appearance was dominated by his diatribe against Airbus. Qatar will no longer convert its A330 passenger aircraft into freighter versions and may opt for older Boeing 767 aircraft instead, Al Baker said.

--With assistance from Andrea Rothman in Paris. Editor: Benedikt Kammel

To contact the reporter on this story: Tamara Walid in Abu Dhabi at twalid@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus