Airbus cancels third A350 as Qatar dispute tops $1 billion – sources

FILE PHOTO: A Qatar Airways Airbus A350 XWB aircraft is displayed at the Singapore Airshow at Changi Exhibition Center

PARIS (Reuters) -Airbus has revoked the contract for a third A350 ordered by Qatar Airways after the Gulf carrier rejected delivery in an ongoing dispute over damage to the surface of the long-haul jets, two people familiar with the matter said.

The number of A350s grounded by the airline in the dispute over exposed and damaged lightning protection has reached 23, bringing the value of compensation sought by the carrier to slightly over $1 billion, they said.

Neither company had any immediate comment.

The two sides have wrangled for more than a year over accelerated surface damage that the airline says raises questions over the safety of the planes, with Qatar’s regulator grounding jets as the problem appears.

Airbus, backed by its own regulator, has denied any safety problems and responded to Qatar’s refusal to take any more A350s until the problem is resolved by revoking deals for undelivered A350s, one by one, and axing a separate contract for A321neos.

Qatar will on Thursday ask a UK judge to extend a temporary order freezing the decision to cancel the A321neo order pending a final hearing on the A350 case, expected later this year.

Bloomberg News reported earlier that Airbus planned to delay a planned increase in A350 production because of the combined impact of the Ukraine war and the Qatar dispute.

(Reporting by Tim Hepher; Editing by Jan Harvey and Barbara Lewis)