Explained | The $1 billion Qatar Airways-Airbus dispute and how it may affect India

Qatar Airways said last month that paint layers on large parts of the affected A350s have been badly damaged, exposing the lightning protection system to wind and pollutants and making the fuel tanks vulnerable to ignition.

The A350 is a carbon-fiber jetliner and relies on metallic foil placed underneath a layer of paint on the surface to help disperse lightning safely over the fuselage.

The airline has grounded 23 A350s jets to date, saying it acted on the orders of the local regulator and has sought compensation from Airbus amounting to about $1 billion.

Airbus acknowledged that some jets delivered to Qatar Airways had a few cosmetic defects but insisted that there was “no reasonable or rational basis” for grounding them. The aircraft manufacturer said that it will fight the airline’s claims.

How did the dispute begin?

The dispute started in November 2020, when Qatar Airways discovered that the paint was peeling off or missing on a five-year-old A350 jet. The airline also found cracks and damage to the plane’s lightning protection.

The airline then asked Airbus to determine the root cause of the defects. Following an inspection, Qatar Airways said Airbus did not provide satisfactory answers to about 980 defects that it had found.

Qatar Airways had asked Airbus for a definitive cause to be identified and a permanent fix to the problem that would satisfy its regulator.

On December 20 last year, Qatar Airways sued Airbus in the UK. The case is due for a hearing on April 26.

Apart from Qatar Airways, Finnair, Cathay Pacific, Etihad, Lufthansa and Air France had also raised concerns about the surface defects of the A350 jets in 2016, but none of the airlines had pressed charges.

What is the airline demanding and what is Airbus’s stance?

Qatar Airways has sued the aircraft maker for the grounding of its planes and has sought compensation of $618 million-plus $4 million a day and has stopped taking delivery of an additional 23 A350s.

The airline said the Qatar Civil Aviation Authority had started withdrawing flying permits for individual A350 planes in a series of letters from June 2021.

Airbus said it will fight the claims, adding that there is no risk to the safety of the A350s. The European manufacturer pointed to flights operated by other airlines and insisted no other airline had grounded A350 jets.

The planemaker said there had been some problems with early surface wear that in some cases had made visible a sub-layer of foil designed to absorb lightning, which it is working to fix.

Airbus also said it is looking at changing the design of the anti-lightning foil for future A350s, but insists there are adequate backup lightning protection measures.

In January, Airbus also canceled a $6 billion contract with Qatar Airways for 50 of its new A321neo passenger jets.

How does the case affect Airbus’s reputation and possible orders from India?

While the dispute between Qatar Airways and Airbus does not directly affect Indian airlines, the outcome of the tussle might affect future orders from India, especially for its widebody A350 planes, expects said.

“If Airbus loses its cases to Qatar Airways, this can cause regulators around the world to look into the safety features of the A350 jets and this may hit future orders for jets,” said Lokesh Sharma, a senior aviation and defense analyst.

He added that the Indian regulator has historically taken the longest time to clear jets for airworthiness and if Airbus loses the case against Qatar Airways, it will struggle to find buyers for its widebody planes in India.

“Historically, Indian airlines have worked with Boeing for its widebody planes. Currently, only Air India and Vistara operate widebody aircraft and both airlines have Boeing aircraft in their fleets. If the A350’s reputation takes a hit in this legal battle, it will be hard for Airbus to convince Indian carriers to buy the aircraft,” aviation expert Sanat Kaul said.

According to an expert who was involved with aircraft selection for global airlines, Boeing 787, by virtue of its earlier entry into service, has an edge over the Airbus 350 jets.

He added that Airbus was looking to overtake the US company in the widebody market after issues like batteries catching fire and engine-related issues plagued the Boeing jets. But similar safety concerns could arise for the A350 if Airbus loses the legal battle to Qatar Airways.

Airbus said last month it expects Indian carriers to order 2,210 jetliners over the next 20 years, making up about 6 percent of its projected order book.