TENSIONS IN TOULOUSE
Tensions are rising in Toulouse as more and more airlines defer deliveries of new aircraft in the face of Coronavirus. There is little sympathy from Airbus who has threatened to sue airlines who do not honour contracts. Between January and May the manufacturer delivered 160 aircraft whilst last year in the same period they delivered 313.
DELAYED DELIVERIES
Aircraft manufacturers and lessors have reported multiple airlines trying to delay deliveries due to the fall in demand for flying. Airlines order books are bursting with new aircraft ordered before the crisis when industry growth seemed unstoppable. The new reality airlines face has led to desperate attempts to backtrack on these orders.
NOT TAKING CALLS
In an interview with POLITICO, Airbus boss Guillaume Faury warned that they may have to take legal action against airlines. Mr Faury claimed that at the height of the crisis some airlines had refused to take calls from the manufacturer. The Airbus head said, ‘It will remain, I hope, the exception […] Airbus will always try to find a different route than going to court.‘ Despite this Faury explained that if airlines default on orders he would have no choice but to take legal action.
RISKY STRATEGY
According to industry experts, this kind of aggressive behaviour is rarely seen in the aviation industry. The industry thrives on good relationships between manufacturers and airlines but this crisis is pushing that to the limit. Insiders have said that airlines have responded angrily to default notices in private. Qatar Airways executive Akbar al-Bakar told Reuters ‘We are negotiating with both Boeing and Airbus to fulfil our requirement to defer and we hope that both the manufacturers will oblige […] They have no other alternative to oblige and if they make it difficult to oblige we will keep them in mind and we will not do business with them again.‘
SURVIVAL
Airlines and manufacturers are both fighting for survival amidst the global pandemic. Airbus’s strategy is risky but in the face of an unknown future they may have to play hard to survive.
