Airbus to sue companies who refuse to honor contracts

Amid the global health crisis, several airlines are concerned about taking on more aircraft than they need over the next few years. Some carriers are trying to get out of their agreements with manufacturers to save money. However, this week, Airbus has hinted there it may sue companies that are refusing to honor their contracts.



Slow period
Just before the weekend, Airbus announced that it netted no new orders for May. Additionally, the firm made 24 deliveries of its aircraft. These shipments were spread between the A220, A320 and A350 XWB families. Despite the lack of business activity, there were no cancellations made during the month.



However, earlier in the week, Qatar Airways warned Airbus and Boeing to defer deliveries. If they don’t do this, they may lose out on future business from the flag carrier of Qatar. Ultimately, the Middle Eastern outfit is just one of several airlines looking to change their delivery plans amid the COVID-19 pandemic.

No conclusion as of yet
Reuters reports Airbus CEO Guillaume Faury shared that some carriers refused to take calls at the height of the situation. His firm has been trying to communicate with these airlines to resolve the issues at hand, but there has not been any progress.



If this trend continues, the European outfit may have to take legal action. However, despite this lack of communication, he hopes for a compromise.

“It will remain, I hope, the exception because we always try to find a different route than going to court,” Faury said, as reported by Reuters.

“But if and when airlines – and it’s happening – have no other choice than fully defaulting and not proposing something better than nothing, or are not willing to do it, then (lawsuits) will happen.“

Challenging times
Within the report, Bertrand Grabowski, an aviation banker turned independent adviser, highlighted how too many planes were being manufactured before the pandemic swept the globe.

Along with this, several carriers without sustainable business models were taking these units on. Subsequently, the coronavirus outbreak catalyzed the overproduction challenges that these companies now face.

With several carriers trying to change their plans at once, it could be detrimental for manufacturer. Therefore, a strong stance by Airbus is not surprising since it is looking to avoid turmoil, such as the collapse of Swissair and Sabena in 2001. Subsequently, it has sent out dozens of default notices to airlines.

Altogether, it is a challenging time for both manufacturers and airlines with both flight activity and production low. However, the aviation industry will eventually rise again. Therefore, it is in the interest of both parties to engage in dialogue to come to a balanced solution.

Simple Flying reached out to Airbus for more information about these reports. A spokesperson for the firm shared that it does not comment on confidential talks with individual customers.

What are your thoughts on Airbus signaling that it may take airlines to court? Do you think that this is the right approach for the company? Let us know what you think in the comment section.

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