Qatar Airways Places Major Order with Boeing

Qatar Airways, one of three Gulf carriers criticized by the three largest U.S. airlines for allegedly taking unfair subsidies from its government, said Friday it will order at least 40 American-made wide-body jets from Boeing, and it signaled it may add 60 more short-haul aircraft from the manufacturer.

The  Washington, D.C. press conference announcing the deal had the feel of political theater, featuring guests from Boeing, Qatar Airways, the government of Qatar, and even the U.S. State Department, which sent Deputy Secretary of State Antony J. Blinken. President Obama’s Secretary of Commerce, Penny Pritzker, even weighed in a press release, lauding Boeing and the airline for the “remarkable milestone they’ve reached.”

This was unusual because the Commerce and State departments had been a player in drama over the past two years, after United Airlines, Delta Air Lines, and American Airlines, as well as many members of Congress, had asked the U.S. government to enter into consultations with Qatar and the United Arab Emirates over allegations Qatar Airways, Emirates Airline and Etihad Airways were violating Open Skies agreements their governments signed with the U.S. The airlines denied the allegations.

The agreements allow Gulf airlines to fly as much as they want into the U.S., but as a condition, governments may not provide airlines with unfair advantages. However, the U.S. government declined to seek consultations with the Gulf carriers, instead speaking informally to diplomats from both nations over the summer. It was far less than what the big three U.S. airlines had wanted.

Not all U.S. travel interests oppose the three Gulf airlines. JetBlue Airways and Hawaiian Airlines, as well as the U.S. Travel Association declined to join United, Delta and American in their opposition to Emirates, Etihad and Qatar.

CEOs from all three Gulf airlines have long argued their airlines provide a major economic benefit to the United States, and Friday’s order was an example of that. Qatar Airways placed firm orders for 30 787-9 Dreamliners and 10 777-300ERs. At list prices, Boeing values the aircraft at $11.7 billion, though airlines often receive major discounts.

Qatar Airways also signed a letter of intent for 60 Boeing 737 Max 8 aircraft for short-haul routes, worth $6.9 billion at list prices.

The airline already flies 777s and 787s, but its short-haul fleet current consists only of Airbus aircraft. However, in recent years, Qatar Airways CEO Akbar Al Baker has publicly criticized Airbus and its suppliers for miscues, and it does not come as a surprise that the airline is now more closely embracing Boeing.

Qatar Airways recently canceled several Airbus A320neo orders due to a problem with the Pratt and Whitney engines. And Al Baker has been upset that Airbus has been slightly behind in delivering its new Airbus A350s to Qatar Airways.

“Our relationship is very strained,” he told Bloomberg in August. “What’s happening at Airbus with the deliveries is seriously affecting our growth.”