[UPDATED]
When Qatar Airways CEO Akbar Al Baker left the Boeing auditorium in Farnborough on Thursday after signing a firm order for 25 MAX 10s, many questions about the deal remained unanswered. In the first place, neither he nor Boeing was willing to comment on the history and details of the order. So how should we read this deal? Qatar’s MAX 10 order leaves many questions unanswered.
When Qatar placed its launch order for up to fifty 777-8Fs in January this year, it also signed a Memorandum of Understanding for 25 MAX 10s plus 25 options. We wondered if this was Qatar betting on two horses, with the MAX and the Airbus A321neo, despite Airbus unilaterally terminating the contract for these aircraft a week before.
During a session at the London High Court in May about the legal case with Airbus, the European airframer said that it had information that the MoU with Boeing had lapsed on June 13. Qatar Airways confirmed this during the skeleton hearing. But on June 21 after the closing of the IATA AGM in Doha, Al Baker told AirInsight that he would confirm the MoU. Interestingly, Airbus brought our story in its prepared document for the skeleton session in London on July 7.
This week in Farnborough, Al Baker told media in various interviews again on Monday and Tuesday that the MoU had indeed lapsed. “We couldn’t agree to a lot of terms and conditions on the MAXs”, FlightGlobal quoted him in its show daily on Thursday, which concluded that Qatar’s single-fleet modernization plans were in limbo.
Things change quickly at airshows
Only a few hours after the show daily was handed out to airshow visitors – and media had to wait for another hour in the Boeing Auditorium -, Al Baker, Boeing Commercial Airplanes CEO Stan Deal, and Senior Vice President Commercial Sales and Marketing, Ihssane Mounir, entered the room. By now, the napkins under which two MAX models had been covered were removed to show all that was about to happen. Things can change quickly at airshows.
“Today is the culmination of a relationship we have with an incredible partner, an incredible friend of the Boeing company”, Mounir said in his introduction. “It’s quite an honor for us to stand up here with you and talk about what we are about to sign on the eve of the 25th anniversary of Qatar Airways, bestowing his trust and word on it and the trust they are putting into our people and products. We have had an incredible year already with Qatar, with the announcement of the launch of the 777-8 Freighter, and today we will make another significant milestone announcement.”
Al Baker then said only that he confirmed the order for 25 aircraft plus 25 options and went on to sign the contract. Before doing this, Stan Deal added: “He taught us what service excellence is all about, his drive for perfection. And that’s certainly what we are doing at Boeing and we fall short to transparently come and talk of your issues.” Al Baker added: “And you enjoy it when I talk to you.” Pictures were made, Al Baker and Deal stood up, and left the room without answering questions.
Here is a short video (<3 min) of the Qatar announcement up until the signing. Watch the body language and draw your own conclusions.
Some basic ones still have to be answered, such as when Qatar will take deliveries of the aircraft on firm order, when it expects to exercise the options, etc. Even 24 hours later, the airline hasn’t even released a press release on the order, while its spokesperson hasn’t responded to the written questions. It proves the sensitivity of the order.
Does Qatar still want the A321neo?
The main question is: are Qatar’s single-aisle fleet requirements satisfied with this order for up to fifty MAX 10s, or is the carrier still keen to get the fifty Airbus A321neo’s for which Airbus terminated the contract in January, citing cross-default in the A350 paint quality case? In April, Qatar sought an injunction from the High Court to reinstate the A321neo contract, but the court rejected this and said that Airbus was free to offer the aircraft to other customers.
In the July 7 skeleton session, the A321neo/MAX 10 situation was still a point of debate. Even if the MoU for the Boeings had lapsed, Airbus stated that it “would still be relevant to the Court’s assessment of how quickly Qatar could obtain Boeing 737 MAX aircraft after trial (and, indeed, of whether Qatar had mitigated any alleged losses).” That question remained unanswered yesterday, as Boeing and the airline didn’t disclose the deliveries.
Deliveries depend then on the certification date of the MAX 10, which as we have discussed here before is most likely to slip until 2023. Without an exemption from the US Congress, the MAX 10 will have to comply with legislation to have a crew alerting system fitted if it fails to be certified by December 31. Boeing still hopes to meet the deadline but admits the process is lengthy as both the airframer and the FAA are taking more time on this. Stan Deal said in Farnborough that Boeing has confidence in the process with Congress to ask for that more time.
Boeing always has provisions in new programs for what it calls “the down-side risks” which gives customers the right to swap one model for another. Delta Air Lines will likely have this right for its order for 100 MAX 10s signed on Monday and rest assured that Qatar Airways has this covered too, even when Mounir stresses that this is now a firm order.
If Al Baker is interested in taking other MAX versions if the -10 is unavailable in time or at all is one of those unanswered questions. Just as is the question if he would try to get his hand on A321neo’s at a later date when, hopefully, relations will have improved. But he knows Airbus is sold out on the neo-line until 2027, so the only option for Qatar would be to source the aircraft from non-Qatari lessors, which doesn’t seem to be Al Baker’s way of doing business.
Yes, Qatar’s short to medium-term requirements for the single-aisle fleet seems to have been satisfied with the signing of the MAX contract in Farnborough. But it could very well be that Qatar Airways in the longer term still wants to have A321neo’s or A321XLRs for the operation of thin or new routes for which the MAX 10 isn’t the perfect aircraft and widebodies are too big.
Active as a journalist since 1987, with a background in newspapers, magazines, and a regional news station, Richard has been covering commercial aviation on a freelance basis since late 2016.
Richard is contributing to AirInsight since December 2018. He also writes for Airliner World, Aviation News, Piloot & Vliegtuig, and Luchtvaartnieuws Magazine. Twitter: @rschuur_aero.
My favourite country Qatar
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