UPDATE 1-IATA boss voices concerns over Airbus-Qatar jet order row

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(Adds detail, quotes)

By Tim Hepher

PARIS, Jan 25 (Reuters) - The head of a body representing global airlines waded into a high-profile dispute between Airbus and Qatar Airways on Tuesday, saying the planemaker's decision to revoke https://www.reuters.com/business/aerospace-defense/qatar-airways-airbus-court-hearing-set-late-april-2022-01-20 a jetliner contract was a new and "worrying" development.

Willie Walsh, head of the International Air Transport Association (IATA), warned suppliers should not exploit market strength, in an apparent reference to a surprise decision by Airbus to revoke a Qatar jet order as part of a deepening row.

Qatar Airways is suing Airbus for more than $600 million in compensation over erosion to the painted surface and lightning protection on A350s, and has refused to take delivery of more of those jets until its regulator's safety questions are resolved.

Airbus insists the claim masks a purely financial dispute and last week revoked a separate Qatar order for A321neo jets, a hot-selling smaller model that Qatar Airways says it needs.

"I would hate to think that one of the suppliers is taking advantage of their current market strength to exploit their position, and that is something we are watching very closely," Walsh told reporters.

The comments by one of the best-known airline leaders marked the industry's firmest response to the row after several carriers discovered what they describe as "cosmetic" A350 surface flaws. Qatar is the only country to have grounded part of the fleet.

Walsh, a long-serving airline leader who ran British Airways owner IAG before taking the helm of the industry's trade body IATA, said it was important for ties between airlines and plane giants Airbus and Boeing to return to normal.

The decision to broaden the dispute by cancelling the A321neo order surprised many in the industry because suppliers generally cling onto orders unless an airline is unable to pay, which Walsh noted is not the case with Qatar's state carrier.

"I think it is a new development and one that everybody in the industry will be looking at," Walsh said, adding that it was also a "worrying" step, though he also said when pressed by reporters that he was making general comments.

Airbus declined to comment on Walsh's remarks. It has said it will "deny in total" Qatar's lawsuit in an English court. (Reporting by Tim Hepher; Editing by David Goodman and Jan Harvey)

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