Qatar drama ends in Airbus deal

Qatar Airways books a $6.4 billion order with Airbus hours after its chief executive, Akbar Al Baker, said the deal has reached an impasse.

Akbar Al Baker, left, the chief executive of Qatar Airways, and John Leahy, the chief operating officer of Airbus, announce an order for 50 A320neo and five A380 aircraft valued at $6.4 billion at the Dubai Airshow yesterday. P Pigeyre / EPA
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Qatar Airways booked a multibillion-dollar deal with Airbus for up to 88 aircraft only hours after the airline's chief executive, Akbar Al Baker, halted talks and ridiculed the aircraft manufacturer for "still learning how to make airplanes".

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The deal - one of the biggest at this year's Dubai Airshow - includes a firm order for 50 A320neos and five A380 double-decker super jumbos, valued at US$6.4 billion (Dh23.5bn). Qatar Airways also has an option for a further 30 A320neos and three additional A380s.

Yesterday afternoon's unveiling of the order capped a dramatic day of brinkmanship at the show after Qatar Airways had previously cancelled an earlier-arranged announcement of a deal.

Mr Al Baker told reporters who had turned up expecting a big announcement that negotiations with the European manufacturer had reached an impasse and he was not hopeful that the order could be reached during the show. Airbus was "still learning how to make airplanes", said the frequently outspoken airline boss.

But at a hastily convened press conference later on, the deal was signed, with Mr Al Baker saying the impasse had been overcome.

"Always in contract negotiations there will be impasse where both sides are entrenched in their positions," Mr Al Baker said. "If we are in [impasse] for just a few hours, it's not a big deal."

He said the deadlock involved disagreement about "two sensitive issues" surrounding the A320neo, Airbus's more fuel-efficient and quieter single-aisle aircraft. The issues were not related to price, but he declined to be more specific.

The drama surrounding the deal overshadowed what was a second big order by a Gulf carrier at the show, despite a softening global economy. Emirates Airline kicked off the event with a bang on Sunday by booking an $18bn order for 50 Boeing 777 aircraft, the most valuable civil order in the US plane maker's history.

"Despite the various risks in the global economy, Gulf airlines are backing themselves to take worldwide traffic from other airlines," said Paul Sheridan, the head of risk advisory at Ascend Worldwide. "European carriers are falling behind."

Qatar Airways operates a fleet of 102 aircraft and aims to have 170 aircraft by 2016, Mr Al Baker said. Of its current fleet, 74 are Airbus planes.

The latest order means Qatar Airways will be the launch customer of the A320neo, which incorporates new engines and large wings tip devices known as sharklets, delivering 15 per cent in fuel savings.

The new A380s double the number of the airline's super jumbos already in the pipeline. Deliveries of A380s are due to begin in two years.

"Qatar Airways supported the development of the Airbus A320neo very early on," said John Leahy, the chief operating officer of Airbus. "We appreciate having built a unique relationship with our friends at Qatar Airways over the years."

Despite yesterday's agreement, Qatar Airways and Airbus remain at odds about design changes to the A350-1000, a wide-body aircraft the airline has ordered.

"We are not happy and they know it," Mr Al Baker said. But he said Airbus was "aggressively" seeking to resolve the issue.

The airline was willing to accept a delay of six months on the A350. Additional delays, however, would not be acceptable, Mr Al Baker said.

Earlier in the day, Qatar Airways signed an order with Airbus's rival Boeing for two 777-200 freighters as part of its expansion of its cargo operations.

The cargo fleet of the carrier based in Doha is currently made up of three 777s and three Airbus A300s. Its cargo fleet will increase to 11 freighters over the next four years.

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