[govindremesh]

Imagine that you're a car fleet owner and are not satisfied with the service support from a certain manufacturer. You raise hell in the media over the fact that your car's paint is peeling off earlier than expected. The manufacturer pushes back and tries to reason with you but you're adamant in not taking deliveries of the new cars that you have pending in your order. Other customers and the consumer forum have observed the issue but haven't raised a dispute, not at least in public.

An year later, you've had enough and you take the manufacturer to the court.

The manufacturer decides they've had enough of you and decide to cancel the big order for the cars you have booked, that are very crucial to your fleet and have an extremely long waiting period!

Yikes!

While this might have not happened in the car world, it has in the aeroplane world.

Qatar Airways and Airbus have been at loggerheads over the paint quality issue on the A350 and the Qatari civil aviation authority issuing a grounding of the fleet. In return, Qatar airways refused to take deliveries of the remaining aircrafts. Airbus reiterated that the paint quality had nothing to do with the airworthiness of the aircraft, and a similar conclusion was drawn by EASA, when Lufthansa and a few other airlines (Cathay Pacific, Etihad et.al.) reported similar issues.

Qatar Airways dragged Airbus to court in December 2021 and Airbus has retaliated by cancelling Qatar's order for A321neo which have a huge waiting list. The said order was placed back in 2011 and amended in 2017.

What do you think of this situation? Was Airbus right in cancelling a customer's order because of an ongoing dispute?

Related links:

Reuters news report on the cancelation

Paint quality dispute explanation video

[Aditya]

Thread moved out from the Assembly Line. Thanks for sharing!

[Rahul Bhalgat]

Well,
Is the real issue different between the two parties? Like some un-fulfilled commitments?

The order cancellation might have been easier (and better "result yielding") strategy for the manufacturer. The legal battles are time taking with unpredictable verdicts.

[fhdowntheline]

Looks like Airbus is hitting them where it hurts. There is no competitor to the A321neo/XLR series. Boeing would have to build an alll-new plane. They have milked the 60s vintage 737 design far too much. They somehow got away with the Max design issues, but that's already quite a stretch.

[GrammarNazi]

Is Airbus being a SoupNazi ?
IMO NO.

What does a business do when a customer is having issues with a product(note that those issues are not around its core function), and despite the manufacturer proactively trying to resolve them, the customer goes on to disrespect & discredit the brand while escalating things to the extent of refusing new deliveries, by their conduct it indicates that they're ok to accept delays till their issues are resolved ?

How is it that they can object that the product with those same specifications not be allowed to be delivered to someone who is willingly accepting deliveries ?

I'm sure the technical & legal side would be more complicated than this as a lot will be based on the written contracts as well as the goodwill on both sides.

[Turbojet]

Originally Posted by GrammarNazi

Is Airbus being a SoupNazi ?
IMO NO.

What does a business do when a customer is having issues with a product(note that those issues are not around its core function), and despite the manufacturer proactively trying to resolve them, the customer goes on to disrespect & discredit the brand while escalating things to the extent of refusing new deliveries, by their conduct it indicates that they're ok to accept delays till their issues are resolved ?

How is it that they can object that the product with those same specifications not be allowed to be delivered to someone who is willingly accepting deliveries ?

I'm sure the technical & legal side would be more complicated than this as a lot will be based on the written contracts as well as the goodwill on both sides.

Such things are first escalated internally and when nothing happens , a public mud slinging contest takes place. If the paint quality isn't satisfactory then it's upto the manufacturer to mitigate the risk. IMHO just accusing the airline of raising this issue to ground planes so as to keep costs low during Covid is not a good business practice unless substantiated with proofs. Cancelling the order in a monopolistic market assuming it was result of public shaming would go against manufacturer in court of law

[GrammarNazi]

Originally Posted by Turbojet

Such things are first escalated internally and when nothing happens, a public mud slinging contest takes place...

Manufacturer & Customer disagreements over product meeting it's specifications will probably be taken up in court & objectively investigated.

Going public is the customers prerogative as long as the customer is willing to accept the responsibility & liability of any possible misinformation they may be claiming.

... If the paint quality isn't satisfactory then it's upto the manufacturer to mitigate the risk.

Again, it depends on whether the paint meets the specifications as would likely be stated in the agreement at the time of placing the order. It's probably going to be quite comprehensive.

We see many passenger cars having paint peeling issues, and the manufacturer expressly provides warranty on paint to a certain limited extent, but usually they won't do anything beyond that.

IMHO just accusing the airline of raising this issue to ground planes so as to keep costs low during Covid is not a good business practice unless substantiated with proofs...

That depends on what they can present & conclusively prove.

Cancelling the order in a monopolistic market assuming it was result of public shaming would go against manufacturer in court of law

Surely a seller can't be held liable for the existence of a monopolistic market. No business would accept liability beyond the extent as agreed at the time of placing the order.

Anyway this is going to take long & events will develop further, let's see.

[Hayek]

Don’t think monopoly providers like Airbus and Boeing should have the right to pick and choose customers - especially for old orders like this one. My faith in the FAA and the European Civil Aviation authorities is very limited indeed - both have been in bed with Boeing and Airbus respectively as seen by the 737 Max and Airbus Neo P&W engine issues. Of course if Qatar refused to take deliver of the A321s, it would have been a different story.

[MinivanDriver]

I have read somewhere that the potential merit in Qatar’s argument is that the paint peeling is not just a cosmetic issue but could be a sign of delayering of the underlying composite structure. Aircraft with almost fully composite fuselage are new and the long term structural issues are just now coming to the fore. Qatars fleet is exposed to extremes of temperature and they may be seeing it more. I guess we have to carefully see both sides of the story. We have seen other manufacturers brushing genuine safety concerns under the carpet leading to catastrophic accidents.

[BoneCollector]

This is a video shared by Qatar Airways and it shows excessive paint peeling, especially where rivets are there. One look at it and you feel that it's really bad quality or is there something else. The peeled paint appears to be as if painted on a unprepared surface.

https://youtu.be/mKN0SpWeILo

[dragracer567]

Ideally, I would side with the customer but the CEO of Qatar Airways does have a history of pettiness. I mean, there was a time when they started a flight to Atlanta just to spite Delta airways due to the public disagreement between the American big 3 and the Middle East big 3 carriers out of which the spat between Qatar Airways and Delta was the roughest. This was despite the fact that there wasn't as much demand between Atlanta and Doha as it is a domestic hub unless you would want to connect to Delta flights (like KLM/Air France does).

The drama heated up when QA changed the aircraft from a B777 to an A380 at the last minute due to which none of the gates that could support an A380 were available and the aircraft had to be serviced using stairs and buses. The CEO of QA went on to complain that Delta 'Gate-Blocked' them and that old and disabled people suffered because of the unavailability of a jet bridge even though it was Qatar Airway's fault for changing aircraft with very short notice and QA aircraft in Doha airport itself are frequently serviced with stairs and Buses (including the last time I was there).

With this kind of history, it's not unthinkable that QA tried to act smart by using the paint issue to ground its fleet and then file a lawsuit to get airbus to pay for it - have your cake and eat it too! Especially given that Lufthansa and Cathay Pacific faced this same issue but treated it as a cosmetic issue.

[libranof1987]

Originally Posted by dragracer567

but treated it as a cosmetic issue.

The aviation world is one with perhaps the most minimal of permissible margins of error. Several accidents have shown that the root cause was an innocent mistake/oversight.

I'm not siding with any party here but paint peel does point to a major issue somewhere? On that note, is Hyundai in the business of painting aircraft?

[Turbojet]

Originally Posted by GrammarNazi

Manufacturer & Customer disagreements over product meeting it's specifications will probably be taken up in court & objectively investigated.

Going public is the customers prerogative as long as the customer is willing to accept the responsibility & liability of any possible misinformation they may be claiming

We see many passenger cars having paint peeling issues, and the manufacturer expressly provides warranty on paint to a certain limited extent, but usually they won't do anything beyond that

Surely a seller can't be held liable for the existence of a monopolistic market. No business would accept liability beyond the extent as agreed at the time of placing the order.

Anyway this is going to take long & events will develop further, let's see.

B2B segment is different, the delivery and maintainence of planes are governed by contracts which have specific clauses for warranty and claims unlike B2C segment. I am part of a similar industry hence i know.

[theflyingguy]

The issue seems more of an oversight or not reading what problems you could face when someone else had faced these. Boeing had a similar issue when they started using the lightweight composite material and Airbus should have done their due diligence when using a similar combination. Boeing also stated that these were cosmetic issues and have no affect on airworthiness of the said aircraft.

The problem for Qatar may be stemming from the sheer number of wide body aircrafts that have been grounded in the critical year where the nation is playing host to a major tournament. They may have seen accelerated/ alternate issues probably due to extreme weather or are just trying to rake in easy money to reduce the Covid forced groundings.

Although airbus maintains that this is a cosmetic issue, Finnair had shared pictures of similar paint damage with even the anti-lightening mesh affected. If this was indeed true, airbus have a bigger problem at hand.

The third party legal review of paint issue should provide the necessary clarity and I believe Airbus should not have cancelled the 321neo since that plane is not in questions. This cancellation in 2022 seems more of arm twisting.

[dipen]

Would fixing the paint work and other damages be around half a million USD per plane. Is it worth fighting a battle. Legal costs would be lot higher. During grounded times, couldn't both parties agree to come to a arrangement of costs (some goodwill, some customer paid; take a leaf from Skoda India on DSG boxes) assuming Airbus feels its only cosmetic and assure it is the same only.