The ongoing legal dispute between Qatar Airways and European aircraft manufacturer Airbus may threaten preparations for the FIFA World Cup in Qatar.

FIFA, France and Qatar
Qatar Airways' own goal

While the ongoing legal dispute between Qatar Airways and European aircraft manufacturer Airbus has sent shockwaves across the entire global aviation sector, it may also threaten preparations for the FIFA World Cup in Qatar. By Stasa Salacanin

Airbus’ cancellation of Qatar Airways’s entire pending order of A350 planes is unprecedented. The dispute arose after Qatar Airways reported that the paint job on an A350’s tail, wings and hull had come off exposing its anti-lightning copper mesh, resulting in the grounding of more than half of its remaining A350 fleet, on the order of its aviation regulator. While Airbus has agreed there is a problem, the manufacturer has issued assurances that the planes are completely safe.

Airbus’ arguments have been backed by European regulators, the European Union Aviation Safety Agency (EASA). Nevertheless, Qatar Airways maintained that the damage posed a significant risk and in December 2021, it filed a claim in London’s High Court suing the corporation for 1.4 billion.

The cancellation of the new A350 came eight months after Airbus cancelled a $6 billion contract with Qatar Airways for the delivery of 50 smaller A321neo passenger jets. Airbus claims that the Qatari manoeuvre was motivated primarily by the negative impact of the pandemic on its business operations and by an attempt to shrink its fleet of expensive long-haul planes.

What about the World Cup?

The dispute comes at a very unfortunate moment for Qatar, however, as it is uncertain how the break-up of relations with Airbus may affect its plans to bring 1.7 million visitors to the country during the FIFA World Cup later this year.

According to Dr. Rico Merkert, professor and chair in Transport and Supply Chain Management at the University of Sydney Business School, this figure – which converts into 200.000 passengers every day during the tournament – represents an even greater challenge.

French President Emmanuel Macron and Qatar's Emir Sheikh Tamim bin Hamad Al-Thani in Doha, December 2021 (photo: Getty Images)
How to save face? The bitter dispute between the two companies is also uncomfortable for the governments of both states, as relations have been very close for the past decade. Qatar has been one of the most important foreign investors in France, with assets of more than 25 billion euros ($26.7 billion), according to research conducted by Qadran, the Franco-Qatari economic circle. While the acquisition of PSG football club has received huge media coverage, it is interesting that Qatar Investment Authority has a stake in Airbus as well, making the whole issue even more complicated

Thomas Jaeger, founder and CEO of prominent ch‑aviation consultancy, explained that grounding such a large number of planes has forced Qatar Airways to dry-lease aircraft from other companies (Ex-Cathay Pacific, Oman Air) and to reactivate some of its A380-800s.

Nevertheless, the “unavailability of these unserviceable aircraft will also negatively impact Qatar Airways during the World Cup period, considering the very temporary spike in demand, further escalated by the lack of hotel capacity in Qatar forcing many tourists to overnight elsewhere in the region and then use shuttle flights from/to Qatar,” Jaeger told Qantara.de.

Considering the event is scheduled to take place outside the typical high season in Europe and elsewhere, Jaeger thinks some of that can be mitigated by other carriers jumping in and providing the capacity Qatar will need as a country.

Marcelo Garcia, Senior Director of InterVistas Consulting Inc, on the other hand, believes the ongoing dispute is unlikely to affect preparations for the FIFA World Cup 2022 or the organisers’ ambitious goals to bring an army of tourists into the country. In his words, “the objective of commercial disputes – either through national courts or arbitration or other fora – is actually to avoid politicising legal issues that are best dealt with by the rules of evidence, expert reports, and independent adjudicators/arbitrators”.

Nevertheless, while the aviation industry closely watches the ongoing brawl, Qatar Airways has so far been the only company to report problems. Scott Hamilton, founder and owner of Leeham Co., an aerospace consultancy, revealed that people’s sympathies lie with Airbus and not with Qatar Airways as the latter’s boss, Akbar Al Baker, “has a terrible reputation among peers and industry. He is well known for hyperbole, ridiculous nit-picking and being incredibly difficult.”

Impact on France-Qatar relations?

The bitter dispute between two companies is also uncomfortable for the governments of both states, as relations have been very close for the past decade. Qatar has been one of the most important foreign investors in France,  with assets of more than 25 billion euros ($26.7 billion), according to the study conducted by Qadran, the Franco-Qatari economic circle. While the acquisition of PSG football club has received huge media coverage, it is interesting that Qatar Investment Authority has a stake in Airbus as well, making the whole issue even more complicated.

World Cup replica in front of Doha skyline (photo: Ulmer/IMAGO)
A case of bad timing: the dispute with Airbus is bound to affect Qatar’s plans to bring 1.7 million visitors to the country during the FIFA World Cup. After all, this figure converts to 200.000 passengers every day during the tournament. According to Thomas Jaeger, founder and CEO of prominent ch aviation consultancy, this very temporary spike in demand will be “further escalated by the lack of hotel capacity in Qatar, forcing many tourists to overnight elsewhere in the region and then use shuttle flights from/to Qatar”

While Merkert does not think the dispute will have much of an impact on their future relations, since the A350 and indeed all Airbus aircraft are very much multinational projects/products, Hamilton, on the contrary, thinks this question hits close to home. Resolution of this problem "may rely more on country-to-country discussions, than on the court or Airbus-airline negotiations". However, the real problem, he noted is that "Al Baker can’t back down because he will lose face. So, the question here is whether there is a face-saving solution?"

As for Garcia, the Qatar-France relationship extends to many areas of mutual interest that go beyond aviation and commercial or trade issues. If anything, he added, "the longstanding and good relationship that both countries have nurtured in the past provides a channel to communicate differences in a constructive manner."

Garcia concluded that “the current dispute should not be turned into a reason to cut back on future investments". Yet, he admits that "there is a possibility the appetite for further purchases of Airbus aircraft by Qatar Airways may not be the same as before, at least in the short-term."

However, as some analysts think that disputing parties crossed the point of no return, it will be interesting to see whether diplomacy can find a way out of this quagmire. While there is no doubt that the Qatar World Cup will prove unique, the Gulf state’s Qatar Airways may face some major challenges with growth over the coming years.

Stasa Salacanin

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