It’s been a long time since we’ve seen an airline put its full faith in Boeing, but Qatar has recently done just that. After a growing, contentious fight with Airbus over paint, Qatar has now asked Boeing to fulfill its narrowbody and cargo needs. This is no small deal.
There were really two components to this deal, though only one got the headlines. Qatar will order 50 777-8 freighters. That makes Qatar the launch customer for the 777X freighter project, and it gives the airline an enormous amount of capacity coming into the fleet.
According to ch-aviation, Qatar today operates 26 777-200F freighters and 2 747-8Fs. It also has 5 787-9s that are being used solely for cargo right now, despite not being actual freighters. It wanted to replace some of its aging fleet, but it also wanted to grow. The two best options were a 777X or A350 freighter, but until recently, neither existed.
Airbus launched its A350 freighter with a capacity of 109 tonnes and 42 pallets on two decks. That’s smaller than the 747-8, but compared to the 777-200F’s capacity of 103 tonnes and 37 pallets, it is bigger. Of course, it’s also more fuel efficient and economical being a newer-generation aircraft.
The A350 would have been a natural for Qatar since it already owns more than 50 A350s in its passenger fleet, but, well, there’s that pesky paint problem. As you’ve undoubtedly heard, Qatar is angry that there is a problem that was initially widely described as peeling paint on the A350s. Airbus effectively ignored Qatar and said it wasn’t a safety of flight issue. Qatar pushed back repeatedly, ultimately showing this video of the problems up close.
This certainly looks like more than just a paint problem, but of course, it’s only one side of the story. Regardless, Qatar says it has been forced to ground 21 of its A350s, and it and Airbus are trading lawsuits in court.
Naturally, this opened the door up for Boeing to come in with a competitive freighter. It also gave Qatar CEO Akbar al Baker something he loves… being first. Qatar will be the launch customer for the 777X freighter with 34 firm and 16 options.
This thing is big with a capacity for 118 tonnes and 44 pallets, but it’s also a bit of an unknown. Right now, the A350 passenger aircraft is flying and has been for some time. The 777X has yet to be certified in any configuration. Boeing is hoping to have the passenger version flying by the end of 2023, though a further delay is far from unlikely. These freighters aren’t expected to arrive until 2027.
This also isn’t a brand new order in that 20 of these airplanes are being converted from passenger 777Xs that Qatar already had on order. But it’s still quite the coup for Boeing. It is a big order for an expensive airplane, and Airbus probably could have had an inside track if not for this mess.
But what’s beneath the headlines is an even bigger blow to Airbus. As part of this spat with Qatar, Airbus decided to retaliate and cancel an order for 50 A321neos that Qatar had firmed.
Up until now, the only narrowbodies Qatar currently flies are Airbus A320 family aircraft. It has 32 in the fleet today and was planning significant growth with the neo. But with that dead, Airbus has now handed the business right to Boeing.
Buried at the bottom of the 777X announcement was another piece of news that Qatar will take 25 737 MAX 10s firm with options for another 25. This too is not a certified aircraft, though Boeing is waiting for the FAA to sign off and it shouldn’t (hopefully) be too long. This airplane doesn’t have the range that Qatar could get out of the Airbus aircraft, but it doesn’t really need the range, or so it says. So, Boeing’s product will do just fine, especially if it allows the airline to give a giant middle finger to Airbus.
It’s one thing when an airline fights with a manufacturer, but it’s another thing entirely when the brawl spirals so far out of control that it just hands off an enormous chunk of business to a competitor. Airbus cannot be happy about this, but frankly, Qatar can’t be either. Who is happy? Well, Boeing is definitely at the top of that list.
24 comments on “Qatar Bets Big on Boeing, Cargo”
biggest news of today. NK and F9 to merge.
Wow. Hadn’t even seen it in the news feeds yet, actually learned of it first from this comment. Interesting.
This does not bode well for JetBlue’s future as an independent carrier. If this triggers another round of M&A, JetBlue’s franchise will be in play. They will be targeted because they have assets that other carriers cannot obtain organically; in particular, their carefully-cultivated New York business.
That is unless the merged company takes the JetBlue name. Even though Kmart bought Sears in 2005, the company took the Sears holdings name.
It is doubtful that United, American, Delta or Southwest would change their name to JetBlue. If you are suggesting some sort of shotgun wedding between JetBlue and/or Alaska and/or Hawaiian, then perhaps so. It will be interesting to see how the Biden DOJ handles the proposed purchase of Spirit by Frontier. Bill Franke is pulling lots of strings and making a mark that dwarfs his previous efforts at America West.
“If you are suggesting some sort of shotgun wedding between JetBlue and/or Alaska and/or Hawaiian, then perhaps so.”
Yes, but not necessarily a shotgun wedding though as all three work well together with or without AA in the mix.
“”If you are suggesting some sort of shotgun wedding between JetBlue and/or Alaska and/or Hawaiian, then perhaps so.”
@ Masters,
Yes, but not necessarily a shotgun wedding though as all three work well together with or without AA in the mix.
American will not take the JetBlue name.
Up next, Alaska takes over Jetblue?
JetBlue will end up being swallowed whole by American Airlines. AA just needs to find a willing Private Equity partner, to help move the acquisition along. Neither have a stellar operation but B6 is a mess and a niche carrier with limited options to grow. Expect AS and WN to also end up in the arms of one of the US3, even with overlapping networks. AS and DL makes some sense. Limited overlap and DL would finally have a real SEA hub, not a desired one. WN’s growth prospects are also reaching their peak. UA could use the added domestic capacity even if it would need shave off overlap in DEN, HOU, and other markets.
This is a joke… right? As I said above, most likely HA, AS & B6 will join forces despite the repeated fantasies by some here of AA buying B6. There is almost zero chance of the DOJ allowing one of the big three carriers taking out WN, it’s not going to happen.
Wonder what Allefgant’s thinking this morning.
The biggest question on this board should be are we losing the taxis or the animals?
John, neither the Animals will be on the taxi.
It’s one thing to have paint/cosmetic issues on a vehicle or surface that is many years old. It’s another thing altogether to have paint start to peel and chip on something that is brand new, as Cathay reportedly experienced on its A350s less than 2 weeks after they were delivered.
I’m sure some of this is Qatar trying to use the the paint issue strategically to tweak its network (given changes in pax travel from COVID), and I’ll buy the argument that the paint issues are largely cosmetic and not a safety issue. After watching Qatar’s video and learning that other airlines in a variety of climates (from FinnAir to Cathay Pacific) have had paint-related issues on their A350s, however, I’m somewhat sympathetic to Qatar. If I purchased a new car with that type of an issue, I’d probably try to get it fixed under lemon laws, or expect some type of solid support from the manufacturer, even for something that may be “cosmetic”.
I wonder how much leverage Qatar really had in its negotiations with Boeing, however, given the very public spat with Airbus… Sure, it’s the launch customer, and Boeing needs orders, but when you sue one of the two major suppliers in a market, it doesn’t leave you with many options.
My brother bought a Saab 9-2X during one of the two years they were on the market. Not long after he bought it, it spent a month at a body shop getting its paint redone on Saab/GM’s dime. If memory serves, paint issues were common on that car.
Since neither the 777 variant nor the MAX-10 are anywhere close to coming to market, to what extent do you think Qatar is whipsawing Airbus? Do you think Qatar could be playing Boeing to get a better deal from Airbus, only to abandon this new order if Airbus comes around? The devil is in the financial details. Also, is the A-350 paint issue endemic solely to Qatar, or are other operators experiencing it as well? Thanks for your thoughts.
Qatar has been the most vocal about it by far, but there have been reports of about a half dozen or so airlines experiencing various issues with paint on the A350. It’s not just airlines in desert/hot climates (Finnair has reportedly had issues with the A350 paint), and it doesn’t appear to be limited to one supplier of paint, either.
Interesting thoughts, lots of ways for Qatar to try to play this situation. I’m sure Qatar is trying to use the paint issue as much as it can, and there’s probably some gamesmanship going on. Regardless, however, peeling paint on newer products is not a good look for any manufacturer (no pun intended).
Thank you for that additional background, Kilroy. Perhaps Airbus needs to take a deeper dive into their finishing processes.
Miss – If this were an MOU or options, then maybe it would be about pressuring Airbus. But these are firm orders. I have a hard time imagining how this could be a game.
So Airbus basically came to the conclusion that “no, the customer isn’t always right”, and Boeing said “Al Bakar is such a nice guy to do business with” (especially at a time when we have nothing but problems with our various commercial aircraft problems).
Frankly, I’d be surprised if Airbus isn’t thrilled to see the back side of Qatar after years of dispute. Let Boeing experience their apparent duplicity.
It’s well-known in aviation circles that Qatar CEO Akbar al Baker is a pompous azzhat. He wields the big purse of the sheikdom on the purchase side, then torments all involved on delivery. His petulant quarrels with Airbus on delivery of the ordered aircraft are legion, and legend. And it’s all owed to his personal super-inflated ego, and the fact he rules his Qatar fiefdom with zero organizational checks and balances.
I must assume Airbus at this point has simply had enough. No amount of money is worth having your employees treated like dirt.
There’s precedent for that: Airbus also has been consistently declining to do any business with that other egomaniac in this space, Michael O’Leary. Because of Mr. O’Leary’s obnoxiousness, Ryanair can’t run competitive tenders because Airbus isn’t bidding. That creates some hedge against O’Leary’s ego running completely rampant, because now he’s reliant on Boeing to supply the hardware. That weakens his position, as was recently apparent when Ryanair failed to close a needed follow-on 737 Max order with Boeing. Boing probably finally put its foot down when the abuse became too much.
Same thing happens with Qatar now. You can bank on Akbar al Baker not getting Boeing’s best terms on that 737 deal, but those things don’t matter in the Middle East when egos are involved. That deal was the last payback the Sheik’s money could buy al Baker. Now that Airbus wants nothing to do with that airline anymore, he’ll have to work off his ego on the upcoming deliveries by Boeing. If Boeing’s freighters are 100% to spec and the suites for al Baker’s harem provided by Boeing on delivery are of the wrong color, expect Boeing to regret being the last one willing to contract with crazy.
Why would anyone prefer to fly in a cramped 737 when an Airbus is wider and quite? If I was looking to book an Emeritus flight I’d have to say “no thank you”