Qatar Airways CEO calls on Boeing and Airbus to defer deliveries

Airline chief says plane-making duopoly should accept delivery deferrals until at least 2022.

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    Qatar Airways CEO Akbar Al Baker said he did not know when passengers would begin flying again in significant numbers and that it would take several years for traffic to return to normal [File: David Ryder/Bloomberg]
    Qatar Airways CEO Akbar Al Baker said he did not know when passengers would begin flying again in significant numbers and that it would take several years for traffic to return to normal [File: David Ryder/Bloomberg]

    The head of Qatar Airways called on the world's two major planemakers to ease demands that ailing carriers accept delivery of new aircraft, saying their future relationship was at stake.

    Airbus SE and Boeing Co. should accept delivery deferrals until at least 2022, Qatar Airways Chief Executive Officer Akbar Al Baker said in an interview Tuesday with Bloomberg TV.

    "What is important is for Boeing and Airbus to show their customers that they are not only there with them in good times, but also in bad times," Al Baker said. "If they don't oblige, they will permanently lose us as a customer."

    Al Baker's comments highlight the intense financial pressure on airlines, especially Gulf-based carriers like Qatar Airways whose business shuttling travelers across the globe has been shriveled by the coronavirus. The CEO said he didn't know when passengers would begin flying again in significant numbers. He said it would take several years for traffic to return to normal.

    Tense Turn

    With the airline industry on life-support, the historically chummy relations between planemakers and customers who in normal times commit tens of billions of dollars at a time has taken a sudden and tension-filled turn.

    Airlines, short of cash, are demanding to cancel, or postpone deliveries, while the manufacturers - who have the added burden of keeping suppliers healthy - are trying to keep handovers and the associated payments flowing.

    Qatar Airways' has about $50 billion of orders for Boeing and Airbus aircraft, based on list prices.

    An Airbus spokesman said the company is in contact with customers but declined to discuss specifics, citing confidentiality. A Boeing spokeswoman declined to comment.

    Bets Off

    Gulf rival Emirates Airline, the world's largest long-distance carrier, said Monday that it's unable to commit to outstanding orders. Bloomberg reported last month that Dubai-based Emirates was seeking to cancel its final five Airbus A380 orders.

    "All bets are off," Tim Clark, the Dubai-based carrier's president, said in an online forum on Monday. "We are nowhere near confident enough that the economics, the cash flows, the bottom line will put us in a good position to be able to guess if we'll buy a hundred of this or a hundred of that."

    Airbus, based in Toulouse, France, and Chicago-based Boeing have both cut back on production to contend with the unprecedented downturn. The European planemaker's top executives will meet this week to reassess output, people familiar with the matter said this week.

    Equity Injection

    Al Baker also said that Qatar Airways has so far kept going with its own resources. He said if the crisis continued and if it did need a bailout, the carrier would likely seek an equity injection from its owner, the Qatar government.

    Deutsche Lufthansa AG, Europe's biggest airline and a big customer to both Boeing and Airbus, has pulled almost all of its more than 700 aircraft out of service, and is working on a 9 billion-euro ($10 billion) bailout from Germany.

    --With assistance from Layan Odeh, Charlotte Ryan and Siddharth Philip.

    SOURCE: Bloomberg