Qatar Airways may review a USD$10 billion deal with Airbus to buy A350 planes, after the European firm signaled plans for changes to the aircraft that could delay delivery, the airline's chief executive said.
Qatar Airways, based in the booming Gulf Arab region, became Airbus's largest customer for A350s when it signed a letter of intent last year to buy 60 of the mid-sized planes.
Chief Executive Akbar Al-Baker said Qatar was still committed to the deal but could not place an order until it knew the specifications of the new model, and warned that delays created by an expected overhaul could upset the airlines' plans.
"We have not signed a purchase agreement because we cannot... purchase an airplane which is undefined," Baker said on Sunday.
"The definition will change, the performance will change, the fuel burn will change. So many things will change that the aeroplane that we signed for in last September is not there anymore," he said. "So we have to, of course, review all our options."
Airbus, under pressure from airlines for a bolder new model, signaled last week that it could make sweeping changes to the A350 to help it battle the Boeing 787.
Analysts said that, if Airbus switched to a completely new design, customers would probably have to wait an extra two years, until 2012.
"However, this puts us in a dilemma, because we will get an aeroplane nearly... two years later than originally envisaged," said Baker.
"And of course we will have to go to the market and buy aeroplanes that would fill in the gap, or else even look at an alternative because airlines cannot freeze their plans because a manufacturer cannot deliver in the time that we require."
Airbus Chief Executive Gustav Humbert said last week that details of changes to the A350 would be announced in the next two months.
Baker declined to be drawn on whether he would consider Boeing's mid-sized 787, which together with its larger long-range sibling, the 777, outsold similar Airbus models 10-to-1 last year.
"Airbus tried to put up a product as a reaction to the 787 and I don't think they did their homework properly," he said.
"But we have a commitment with Airbus and we will stick to that commitment provided our requirements are met. And met in the correct timeframe."
Qatar, one of the world's fastest growing airlines, hopes to expand its fleet from 46 mostly Airbus aircraft to 115 early in the next decade.
The airline had announced plans to buy Boeing 777 planes earlier this year but said it was still reviewing the deal and could opt instead for the Airbus A340.
"We are still saying that. We are talking to both aircraft manufacturers and we will decide imminently on which way we are going to go," Baker said, adding that a decision was likely within weeks.
The state-owned airline has one cargo plane and will convert two passenger aircraft into freighters this year, he said.
Qatar Airways carried 6.3 million passengers in the financial year to March and hopes to double that number over the next five years. Baker forecast that passenger numbers would rise to 8 million in the current financial year.
Although the airline is owned by the government of Qatar, a major oil and gas exporter, Baker said it received no fuel subsidies and was feeling the pinch of rising energy costs.
"Unfortunately we are not hedging at the moment. When we realized that we had to hedge, it was already too late," he said. "Once the oil prices go down, then of course we will hedge."
