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£1 Billion headache as Qatar axes four jets

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Qatar Airways has axed orders for four A350s because of delivery delays, handing the European planemaker a new headache over what to do with jets worth £1 billion pounds.

The decision means Airbus will have to try to resell or reallocate the 283-seat jets at a time when demand for big planes is softening, and could cost Airbus $60-80 million to rip out and replace interiors designed to fit the airline's plush brand.

The cancellation follows concerns about delays and quality problems on cabin equipment for the A350, but also comes at a time when Qatar is entering the second month of a crisis caused by a ban on Qatar's use of the airspace of four Arab nations.

Qatar Airways Chief Executive Akbar Al Baker said earlier any delays were the planemaker's responsibility.

"We are asking Airbus to deliver it faster," he told a Dublin news conference. "The delay is from Airbus."

An Airbus spokesman said the cancellations were related to "known supply chain issues". Asked what would happen to the undelivered A350-900 jets, he said: "They will be reallocated".

Qatar Airways has a reputation for being demanding when reviewing aircraft for quality defects before delivery.

However, some analysts have said the Gulf political crisis may give the airline a further incentive to slow deliveries, compounding the impact of relatively weak oil prices.

"All the Gulf carriers realise they have ordered too many wide-bodied aircraft and don't have room for them, especially now," said an aircraft finance industry official.

Al Baker last month denied the Gulf spat would interfere with Qatar Airways' growth or aircraft deliveries.

The Qatar setback extends a torrid week for Airbus as it tries to bounce back against a resurgent Boeing and shake off an internal row over a shake-up in its sales organisation.

Airbus took 248 orders between January and June, or 203 after cancellations. As of June 27, Boeing had notched up 407 orders this year, or 361 after cancellations.

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