Stock - Qatar Airways and Airbus dispute
Airbus said last month it had revoked all 19 remaining A350 orders from Qatar Airways, severing outstanding business with the Gulf carrier for new jets. Image Credit: Bloomberg

London: Airbus and Qatar Airways fought in court in front of Boeing on Friday as a dispute over damage to A350 jets descended into a tug-of-war over confidential documents while the sums at stake in their unprecedented falling-out topped $1.5 billion.

Boeing was also dragged into the case for the first time as lawyers quarrelled over access to a preliminary contract for its 737 MAX jets - illustrating the domino effect on a $150 billion global jetliner industry from the rare London legal battle.

Qatar Airways is suing Airbus in a division of the High Court over damage to the painted surface and anti-lightning system on A350 jets, saying safety could be at risk.

Backed by European regulators, Airbus acknowledges quality flaws but insists the jets are safe.

The two sides must provide each other with thousands of pages of documents as their dispute - which has already altered the shape of planemaking competition - heads towards a rare London aerospace trial in mid-2023, barring a settlement.

The case has lifted the lid on the inner workings of the jet market, including contractual details and the industrial playbook for preparing delivery of new jets.

The number of A350s grounded by Qatar because of surface damage has risen to 28 out of 53 A350s in its fleet.

Airbus said last month it had revoked all 19 remaining A350 orders from Qatar Airways, severing outstanding business with the Gulf carrier for new jets.

Both sides raised the stakes again on Friday as they issued mutual claims of foot-dragging over the release of documents, as well as for the return of tens of millions of dollars of upfront deposits to the airline and credit payments to the manufacturer.

Confidentiality row

In a counter-claim in February, Airbus asked Qatar Airways for $220 million in damages and detailed another $185 million of credits against future deliveries which it said had been paid in advance into three funds for the development of Qatar’s aviation sector as part of the original A350 deal in 2007-2009.

Airbus is seeking reimbursement and said in a summary of arguments ahead of Friday’s hearing that it had sought details from the airline on how the money had been spent. Qatar Airways did not immediately respond to a request for comment.

People familiar with the case said Qatar Airways was strongly arguing that the money had been invested as anticipated and dismissed discussion of the funds as a legal manoeuvre.

For its part, Qatar Airways accused Airbus of trying to bring European regulators “on side” by controlling what they saw.

It reproduced an internal Airbus email titled “Easy mtg” from the top A350 engineer asking colleagues to show the European Union Aviation Safety Agency (EASA) the worst damage, adding: “We need to damp the first impression they will have”.

An Airbus spokesperson said this demonstrated a “warts and all” approach. EASA did not respond to a request for comment.

Boeing, meanwhile, marched into the court fight on Friday, putting both industry giants on stage with one of their largest buyers for possibly the first time outside the air shows where their multibillion-dollar jet deals get announced.

Boeing insisted it did not plan to get involved in the escalating dispute between its rival and its client.

But its appearance came months after the A350 dispute widened when Airbus revoked a separate deal with Qatar for 50 A321neo jets, arguing they were linked by a crossover clause.

Qatar subsequently ordered the Boeing 737 MAX and this catapulted arguments over the relative merits of the jets into court, with Airbus unusually saying the MAX was as good as the A321 in a bid to avoid being forced to build the jets for Qatar.

The airline has accordingly been ordered to hand over a preliminary version of the MAX contract to Airbus, but Boeing objected on Friday to the number of people in Airbus being allowed access to data on its best-selling jet.

“The disclosure of pricing information...that is dynamite,” Boeing’s lawyer Paul Stanley told the court.

Judge David Waksman ordered documents to be separated into tiers, with only the most restricted containing jet prices.