Exclusive-Political leaders drawn into $2 billion Airbus-Qatar jet dispute By Reuters

By Tim Hepher and Elizabeth Pineau

PARIS (Reuters) – A dispute between Airbus and Qatar Airways over grounded A350 jets rose to the attention of French and Qatari leaders, according to a French official and internal Airbus emails recently released as part of a UK court battle.

The two leaders discussed the issue last December during a visit by French President Emmanuel Macron to Doha, the French official told Reuters on Wednesday. Reuters was unable to determine the nature or outcome of the discussion.

The exchange marks the first confirmation that a bitter contractual and safety dispute spilled beyond the courtroom. The dispute has led to fractured ties between the two companies and the unprecedented cancellation of large-scale orders.

“(We) confirm that the subject was brought up along with other aspects of the bilateral economic relationship,” the official said, speaking on behalf of Macron’s office.

Qatar’s government communications office declined any comment on the matter.

The French official was responding to a Reuters query about previously unreported emails released last month in court documents as part of the UK court fight between Qatar Airways and Airbus over combined claims for damages approaching $2 billion.

The emails were supplied to the airline by Airbus under legal disclosure procedures ahead of a provisionally scheduled mid-2023 trial, barring a settlement before then.

Airbus declined to comment on Thursday ahead of a new procedural hearing in a division of the High Court in London on Friday. A spokesperson for Qatar Airways could not immediately be reached for comment.

The airline says widespread paint cracking has exposed deeper surface damage on the jets, prompting it to stop taking deliveries. Qatar’s national regulator also progressively grounded 29 planes on safety concerns over the past year.

Airbus has acknowledged quality problems with its premier long-haul model but denies any risk to safety and has cancelled all outstanding new business with Qatar Airways, which has increased purchases from rival Boeing (NYSE:).

The dispute marks a public divorce at the heart of the $150 billion jet industry with billions of dollars at stake.

Alongside the legal process, Airbus has also discussed plans internally to advance its case on multiple political, regulatory and commercial fronts, according to several emails disclosed as part of preparatory hearings.

“Political: visit of Mr Macron & (Airbus CEO) Guillaume Faury last weekend with the Sheik(h). Could bring some levers, not yet seen,” a senior Airbus engineer wrote in an email to Chief Technical Officer Sabine Klauke on Dec. 8 last year.

Macron met the Emir, Sheikh Tamim bin Hamad al-Thani, five days earlier to mark 50 years of ties with a key economic ally. The two leaders also held a lunch meeting in Paris in May.

Some European diplomats told Reuters that pressure to maintain good relations with Qatar is increasing as the continent heads for a winter of energy shortages, with Qatar seen as an alternative gas supplier to Russia.

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The Dec. 8 email was included in a publicly available witness statement submitted by the airline along with documents for a preliminary hearing in October.

Other emails suggest parallel negotiations began as early as last December just as the legal fight was becoming public.

“The last 2 aspects (political and commercial) should be continued in parallel to find a quick escape of the crisis with a win-win situation,” according to the Dec. 8 Airbus email.