By the close of play, Airbus’ stock dived 10.4 percent to close at $53, wiping $5b of the company’s market value.
Most of that loss was due to the European aerospace company’s admission that profits would be “rather flat” in 2016 as it transitions to making newer planes. But the company’s stock had already begun to slide after one of its customers refused to take delivery of the aircraft maker’s newest plane.
In two simple sentences posted on Qatar Airways’ Facebook page the rout had begun.
“Qatar Airways announces that the AirbusA350 aircraft ceremonial transfer of title has been postponed until further notice.” Qatar Airways said. “With the imminent launch of the new Airbus A350 programme, both entities are committed to introducing the A350 very soon.”
Qatar Airways refused to elaborate raising concerns about the aircraft.
The Middle East’s third-largest airline had been expected to take delivery of the first A350 on Saturday, December 13. Airbus has been banking on the A350 to take on Boeing’s much-troubled but much-improved 787. Airbus has spent as much as $14b developing the A350 and has 778 orders from more than 40 customers, Qatar Airways being the biggest.
It is the second time this year that Qatar Airways has refused to take delivery of an Airbus aircraft. Qatar Airways CEO Akbar Al Baker is notorious for his high standards and has rebuked Boeing and Airbus for delays and problems with their planes.
The A380 super-jumbo was delayed for three months while Airbus fixed problems in the cabin.
At the Dubai Air Show, three year ago, Akbar pulled out of press conference with Airbus saying: “Airbus is still learning how to make airplanes”.
Airbus told Al Jazeera that the A350 was on the tarmac “ready to go” reiterating comments reported by the Reuters news agency.
“The plane is ready, it’s on the tarmac, I’m confident delivery will be very soon,” Airbus CEO Tom Enders said.
A source told Al Jazeera that Qatar Airways was quibbling over discounts on the price of the aircraft. An A350 can cost between $260.9m – $340.7m – according to Airbus’s 2014 price list. As a launch customer airlines can receive huge discounts on list prices – this usually takes into consideration possible delays. But the A350 has hit all its targets.
But two other executives told Al Jazeera that the problems were not insurmountable and had nothing to do with the price of the aircraft.
Airlines usually send over a team of engineers, pilots and designers to check the aircraft over before the handover. It appears something was amiss.
With the A350 on the tarmac, the Toulouse-based company has a fleet of aging models and is having trouble flogging its A380 super jumbo. It could stop making the plane entirely.
This is the last thing Airbus needed. But for Qatar Airways the customer is always right.