Qatar Airways slams Boeing, may buy more Airbus

By Tim Hepher and Cyril Altmeyer

PARIS (BestGrowthStock) – The head of Qatar Airways criticized Boeing and accused Air France of rejecting peace overtures on Thursday in a growing airline trade war over financing as Gulf carriers shore up their plans for rapid growth.

Chief Executive Akbar Al Baker lamented problems in plane projects at Boeing Co (BA.N: ) and Canada’s Bombardier Inc (BBDb.TO: ) and threatened to shift extra business to Europe’s Airbus (EAD.PA: ).

He said Boeing had failed in development of its 787 Dreamliner, which is seen likely to suffer a further delay following a fire on a test flight, while Bombardier was suffering problems with its C-Series jetliner.

“I was really taken aback by the (787) program. I never expected a program could be delayed so much with a company like Boeing, which has pride in its quality. They have very clearly failed,” he told a news conference.

Development of the carbon-composite 787 is running about three years late and analysts expect a further delay as Boeing addresses a fire which led to test flights being grounded.

Al Baker said Qatar Airways had been notified of some delays to 787 deliveries, but declined to say whether this was before or after the prototype fire on November 9. Boeing declined to comment.

It is not the first time Al Baker has criticized Boeing and his remarks were spiced with warnings that Airbus could not afford to delay its second-largest plane — a 350-seat variant of the future A350 — or Boeing would have time to retaliate.

In 2006, Al Baker criticized Airbus’s handling of delays in the 500-seat A380 and demanded compensation.

On Thursday, however, Al Baker said he was considering increasing his order for the world’s largest airliner.

“Today we have only five A380s on order and most definitely we will consider increasing this order,” he said.

Qatar Airways has not yet chosen engines for the 500-seat plane, but its decision will not be affected by the recent blowout of a Rolls-Royce (RR.L: ) engine on a Qantas (QAN.AX: ) A380, he said.

Al Baker said Qatar could order a possible upgrade of the Airbus A320 150-seat jet, the backbone of many medium-haul fleets, which he expected to be launched by year-end.

The A320 with new engines, dubbed the NEO, is designed to compete with Bombardier, which is trying to eat into Airbus and Boeing’s markets. Qatar nearly ordered the Bombardier C-Series at Farnborough in July, but pulled out at the last minute.

Qatar’s concerns relate to the plane’s engines, produced by United Technologies (UTX.N: ) unit Pratt & Whitney.

“If they (Bombardier) do not roll up their sleeves pretty fast then the NEO will eclipse them and people will be interested because they have the infrastructure in place,” Al Baker said.

Bombardier said its 110-145 seat C-Series jet was on track and it was quite pleased with engine progress.

AIRLINE TENSIONS

Qatar and other Gulf airlines want new planes delivered quickly to support their plans to make the region an important hub. But there have been bitter clashes with European airlines over the alleged impact on traditional carriers.

U.S. and European airlines have cried foul over credit rules that grant export loans to airlines in the Gulf and Asia when they buy Boeing or Airbus aircraft, but prevent airlines in countries where the planes are produced getting the same credit.

In a surprise move, a group of airlines including Qatar’s Gulf rivals, Dubai-based Emirates and Abu Dhabi-based Etihad, effectively called the bluff of traditional airlines on Thursday, calling for them to get exactly what they want.

Emirates Airlines President Tim Clark reassured European airlines on Wednesday that Gulf carriers did “not want to kill” them, but he suggested traditional airlines would struggle to compete even with the extra assistance they are asking for.

The issue of export credits has turned into an ill-tempered battle as the airline industry comes out of recession, echoing a long-running feud over subsidies between Airbus and Boeing.

Al Baker said he had invited both the chairman and the chief executive of Air France-KLM (AIRF.PA: ) to a dinner he would host in Paris later on Thursday, but that they had failed to respond.

“The hand of friendship extended to Air France has not been reciprocated and this is not conducive to relations between our countries,” he said.

Air France-KLM said it never commented on diary matters.

“People have to change their perception of Arab carriers. We have to make money. Our governments have made it clear we have to stand on own feet or shrink,” Al Baker said. “We don’t have an oil well behind our headquarters to fuel our growth.”

(Additional reporting by John McCrank and Bhaswati Mukhopadhyay, Editing by Erica Billingham and David Holmes, Gary Crosse)

Qatar Airways slams Boeing, may buy more Airbus