Qatar Airways Sues German Emirati JV For $600m

Qatar Airways is suing German Emirati joint venture construction company Lindner Depa Interiors (LDI) for $600 million for failing to build lounges at New Doha International Airport on time and “causing a significant delay by up to a year”.

In a statement, the airline said LDI had undertaken to complete the construction of 19 airport lounges at NDIA by the summer in a contract worth over $250 million, “but failed to complete the project on time”. The airport, due to have opened this month, now aims to open in the second half of 2013.

Qatar Airways, set to be the airport operator, claimed LDI had “badly defaulted with the delayed airport opening seriously affecting the airline’s expansion plans, causing huge revenue losses, increased construction costs and delay penalties, and more importantly, inconveniencing passengers”.

LDI was described as having “performed extremely poorly in executing the project and failing to meet construction targets”.

The opening of the $15.5 billion NDIA will alleviate capacity pressures on the current Doha International Airport, which has no room to expand. It handles almost 20 million passengers a year, with over 80 per cent of passenger traffic generated by Qatar Airways.

Qatar Airways Chief Executive Officer Akbar Al Baker said: “We are extremely disappointed by the poor performance of LDI which has failed to carry out the contract in a timely manner which in turn has forced a delay of the opening of the New Doha International Airport by nearly a year.”

“We have been badly affected as an airline with the delay impacting Qatar Airways’ expansion plans that include new aircraft deliveries and opening up new routes at the rate we want to and more importantly causing a lot of inconvenience to our passengers in addition to the revenue losses to the airline and its subsidiaries.

“Our subsidiaries have been also affected by this delay including Qatar Duty Free, the food outlets and the ground handling which had a negative impact on the revenues of the airline.

Phase One of NDIA is slated to handle over 28 million passengers a year, with the capacity expected to more than double by the time the airport is fully operational in 2018.

Al Baker added that “further claims against LDI were expected from other entities affected by this delay”.