Qatar Airways Warns Airbus And Boeing Against Resisting Deferrals

Qatar Airways has today warned Boeing and Airbus not to resist its requests to put off aircraft deliveries. The struggle is over whether the airline or manufacturer should bear the brunt of the COVID-19 crisis. Qatar has threatened not to do business with the companies again.

Qatar Airways A380
Qatar warns Boeing and Airbus not to resist order deferrals. Photo: Getty Images

Qatar CEO says manufacturers must oblige

Reuters reports that the CEO of Qatar Airways, Akbar al-Baker, is in talks to defer the deliveries of new aircraft. In a phone call, al-Baker told Reuters,

“We are negotiating with both Boeing and Airbus to fulfill our requirement to defer, and we hope that both manufacturers will oblige. They have no alternative to oblige, and if they make it difficult to oblige, we will keep them in mind and we will not do business with them again.”

The world’s two largest aircraft manufacturers have received orders worth tens of billions of dollars from Qatar. But with the demand for air travel plummeting due to the COVID-19 pandemic, the airline has no requirement for these new aircraft to be delivered.

Al-Baker has said that he’s hopeful of reaching agreements with Boeing and Airbus. However, if that’s not possible, he warned that Qatar would cancel orders. The CEO is better known for his criticism of delays at manufacturers.

Akbar al Baker
Akbar al-Baker takes a tough stance with manufacturers. Photo: Getty Images

Qatar is reducing its fleet

Qatar Airways has declared that it is now the world’s largest carrier. However, the airline is making moves to reduce the size of its fleet of around 200 aircraft because of the coronavirus crisis.

The airline has already cast doubt over its order for 60 Boeing 737 MAX planes. Five that have been delivered already will be sold. Al-Baker has said that he hopes to reach an agreement over the remainder on order.

Qatar has returned four Airbus A350 aircraft that were leased from Latin American airline, LATAM. It will be mid to late 2021 before its fleet of 10 A380s is likely to take to the skies again.

For the foreseeable future, the company will keep around 20% of its fleet on the ground. It doesn’t expect to open up all 165 of its pre-coronavirus services before 2023.

Qatar Airways
Qatar could come back from the crisis a smaller airline. Photo: Getty Images

Production and staff cuts at Boeing and Airbus

Reduced orders and requests for delays in the delivery of aircraft are hitting manufacturers hard.

Last week, Boeing announced that it was starting involuntary layoffs and cutting almost 7,000 jobs. Added to over 5,000 voluntary redundancies, it takes the company’s job losses to around 12,300.

Airbus has already reduced the output of the A350 by 40%, and the A330 and A320 each by around 33%. However, the company was reported this week to be considering cutting A320 production by up to 50% because of the falling demand.

While Airbus has furloughed thousands of workers, there have been no job losses so far. But it is another area up for discussion as the company looks to safeguard its future. There have been warnings of deep cuts to the workforce.

As a further knock-on from reduced aircraft production, Rolls-Royce said last month that it might have to cut up to 8,000 jobs.

There seem to be divisions in the industry as to how quickly it will recover from the pandemic. Do you think the forecasts are overly pessimistic? Leave your thoughts in the comments section.