Bloomberg News

Qatar Air CEO Makes Up With Airbus After Lashing Planemaker

November 16, 2011

(Updates with engine orders in 12th paragraph.)

Nov. 15 (Bloomberg) -- Qatar Airways Ltd. Chief Executive Officer Akbar Al Baker reconciled with Airbus SAS and signed an order valued at $6.4 billion, hours after publicly lambasting the European manufacturer for its inability to build aircraft.

The firm order is for 50 A320neo jets, with an option for 30 more, and as many as eight additional A380 superjumbos, Al Baker said at the Dubai Air show today. Signing the deal had fallen through hours earlier after talks stalled.

“Every day, sometimes you get stuck somewhere in the middle, especially when the lawyers throw the spanner into the wheel,” Al Baker told a press conference in Dubai. “The impasse was on an issue of the aircraft, and this is why I mentioned that Airbus is forgetting how to make airplanes.”

Al Baker, who said his airline receives a new jet every 18 days, used the show as a platform to voice frustration with programs including the A350 wide-body now under development. The Qatari airline is the A350’s first customer, and Al Baker said today it’s better to wait for the right plane than rush after Airbus announced a delay of as much as six months last week.

The airline CEO singled out the chief strategist of Airbus parent European Aeronautic, Defense & Space Co., Marwan Lahoud, as instrumental in salvaging today’s order. Journalists had waited for almost 30 minutes this morning for an announcement, until Airbus said the deal was still “too hot.”

Al Baker then used a press conference with Boeing Co. to rip into Airbus, saying the company is “still learning to build aircraft.”

Conspiratorial Grin

Airbus is “looking aggressively” at the A350-1000, the largest variant of the jet, and has “returned to the drawing board” on the aircraft, Al Baker said. Airbus Sales Chief John Leahy said he’d need to send his regional deputy to Doha to explain the aircraft to Qatar Airways.

Leahy opened the briefing by thanking Al Baker for his “unwavering professional leadership,” a remark that prompted a conspiratorial grin from the Qatar Airways chief. Airbus isn’t in the process of redesigning the A350-1000 once again, after announcing four months ago that it would add more thrust and range, Leahy said.

Qatar Airways will also be the first operator for all three variants of the A320neo, a more fuel-efficient update of the existing single-aisle jet, Leahy said. The A320neo has become the best-selling aircraft in aviation history, with Airbus securing more than 1,000 firm orders for the aircraft since December.

Freighter Dispute

The two sides failed to overcome their differences on freighter aircraft, with Qatar Airways likely shelving a plan to convert Airbus A330 wide-body jets into cargo planes and opting for Boeing 767 jets instead. Al Baker said he would have preferred to convert the A330s, and there remains a “small” chance of a later accord, the executive said.

Qatar Airways has 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.

The jets in today’s Qatar Airways orders will be equipped with engines from United Technologies Corp.’s Pratt & Whitney. Pratt also won an order to supply geared-turbofan engines for 50 Airbus A320neos being purchased by Kuwait-based Alafco Aviation Lease & Finance Co.

Engine Prices

Together, the 200 engines in the two deals have a value of $2.4 billion, based on analysts’ estimates for list prices. Pratt competes for engine orders on the A320neo with CFM International, a venture of General Electric Co. and France’s Safran SA.

Qatar Airways hasn’t decided which engines will be used on its A380s.

The carrier has an agreement with Airbus to cover the delay on the A350-900, CEO Al Baker said, after Airbus announced last week the hold-up would lead to a 200 million-euro charge. The airline has ordered 20 of the large A350-1000 model, 40 of the mid-sized A350-900 and 20 of the shortest member of the family.

“In the evolution of an aircraft, there will be constant improvements,” Al Baker said. “Every manufacturer constantly improves its aircraft when it is being designed. It is better to wait and get the plane that does the job.

--With assistance from Tamara Walid in Abu Dhabi, Lara Setrakian in Dubai and Rachel Layne in Boston. Editors: Benedikt Kammel, Christopher Jasper

To contact the reporters on this story: Benedikt Kammel in Berlin at bkammel@bloomberg.net; Andrea Rothman in Paris at aerothman@bloomberg.net

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


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