UPDATE 3-Qatar Airways slams Boeing, may buy more Airbus

* CEO says Boeing has failed on 787 program, sees delays

* Sees C-Series problems, Bombardier says plane on track

* Will consider increasing Airbus A380 orders

* May be among early customers of upgraded Airbus A320
(Adds Bombardier comment)

By Tim Hepher and Cyril Altmeyer

PARIS, Nov 25 (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 Nov. 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.”

UPDATE 3-Qatar Airways slams Boeing, may buy more Airbus