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Qatar Air launches $600m airport legal claim

by Andy Sambidge on Dec 30, 2012




Qatar Airways said it will file a $600m legal claim against German Emirati joint venture construction company Lindner Depa Interiors (LDI) for causing a significant delay to the opening of the New Doha International Airport by up to a year.

The Gulf carrier said in a statement that LDI had undertaken to complete the construction of 19 airport lounges by the summer of 2012 in a contract worth over $250m, but failed to complete the project on time.

The $15.5bn airport was due to have opened this month but has now been put back to 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 current Doha International Airport handles almost 20 million passengers a year, with over 80 percent of the passenger traffic generated by Qatar Airways alone.

Qatar Airways CEO Akbar Al Baker cited "extreme poor performance" and inability to execute the work within the time required for the project as the reasons for LDI’s contract being terminated, resulting in the legal action now being taken.

“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,” said Al Baker.

“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."

He added: “The current airport we are operating from is already full to capacity with virtually no room to grow. We relied on moving to our new home, the New Doha International Airport this month, but this has not happened.

“Operational trials of the new airport have been ongoing since the summer as everything was in place, but incomplete airport lounges proved a serious setback.”

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.
 


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