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Qatar Airways' Boeing 737 deal has lapsed, UK court told

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·3-min read
A view shows the Qatar Airways' airbus A350 parked outside Qatar Airways maintenance hangar in Doha
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By Tim Hepher

LONDON (Reuters) -Qatar Airways has indicated that a provisional agreement to buy up to 50 Boeing 737 MAX jets has lapsed, Boeing's rival Airbus said in a court document released on Thursday.

The deal, signed in Washington in January, is part of a series of inter-locking agreements caught up in a London court dispute between Airbus and the Gulf carrier over a larger jet.

Airbus requested a copy of the Boeing 737 MAX agreement after the airline brought it up as part of its bid for compensation for damage to the A350, now worth $1.4 billion.

Qatar Airways initially resisted the request on the grounds that the provisional Boeing deal had now "expired", Airbus said in a summary of arguments presented ahead of a UK court hearing.

Qatar Airways, whose own preparatory written arguments made no reference to the Boeing deal, had no immediate comment. Boeing declined comment on discussions with airline customers.

A redacted version of the Boeing agreement is likely to be shared with Airbus, people familiar with the case said following a procedural hearing on Thursday.

One person familiar with the case described the dispute over disclosure of the document as a "red herring" as Airbus and Qatar Airways lurch towards a trial on the core A350 dispute.

There was no independent confirmation of the status of the contract, which involves a type of 737 MAX that is itself in doubt over regulatory issues in the United States.

Boeing has a December deadline to win approval for the 737

MAX 10 or face new constraints, prompting Boeing to suggest on Thursday that the largest version of the MAX could be scrapped.

REGULATORY MEETING

Industry sources say provisional contracts of the type signed in January are typically valid for a finite period, but can also be renewed or superseded by more formal negotiations depending on intentions of the planemaker and buyer.

The expiry of a provisional contract in one form does not automatically mean that the whole deal will collapse, they say.

Industry publication AirInsight last month quoted Qatar Airways Chief Executive Akbar Al Baker as saying it intended to confirm the order for 25 Boeing 737 MAX 10 plus 25 options.

Qatar has refused to take delivery of more Airbus A350s in a dispute over damage beneath their painted skin, prompting Airbus to withdraw a contract to provide it with smaller A321neos.

Qatar had meanwhile provisionally ordered the Boeing 737 MAX which competes with the A321neo, sparking the row over whether the Boeing contract could be dragged into the UK court battle.

At the court's request, the two sides may arrange a meeting between Airbus and Qatari regulators who have grounded 23 A350s, as well as Qatar Airways and European regulators, in order to discuss technical matters, people familiar with the case said.

Airbus has said it is in separate talks with Qatar Airways to try to end the dispute between two of aviation's largest players, but there are so far no visible signs of a settlement.

(Reporting by Tim Hepher;Editing by David Goodman, Emelia Sithole-Matarise and David Gregorio)

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