Airbus and Boeing jet delivery delays spark penalties battle

A battle for compensation is brewing over delays in the delivery of commercial jets, with a Dublin aviation summit descending into a blame game over the worst industrial disruption in years. Airbus and Boeing are on average delivering new jetliners three-to-six months late, blaming post-pandemic havoc in supply chains, delegates at two major aviation finance conferences said. Powerful leasing companies heaped pressure on planemakers over the delays, with Air Lease Executive Chairman Steven Udvar-Hazy telling this week’s Airline Economics conference that manufacturers had “grossly misjudged” their output. Airbus and Boeing defended their record, saying the situation is the result of a mix of factors, from the pandemic to weak supply chains, and a sudden snapback in travel demand. The public exchanges reflect the battle lines in negotiations behind the scenes over whether manufacturers should bear contractual responsibility by paying penalties, even when suppliers are at fault, people involved in the discussions said. With January already marked by fresh delay notices being sent to airlines and leasing companies, experts said millions of dollars of exposure are riding on one word: “excusable”. Aircraft contracts contain dense descriptions of adverse factors which excuse manufacturers for multiple types of delay, meaning they can avoid paying penalties or “liquidated damages”. Excusable delays include “acts of God”, natural disasters, fire, flood, earthquakes and epidemics, among other examples, according to extracts of past contracts filed with regulators. They may give the manufacturer a get-out in the event of a failure to obtain parts. Wars and strikes are also excusable.<br/>