Qatar Airways has decided to file a USD 600 million legal claim against German Emirati joint venture construction company Lindner Depa Interiors (LDI) for causing a delay to the opening of New Doha International Airport. Qatar Airways is the airport operator of this delayed project.
According to a statement by the carrier, LDI was contracted to complete the construction of 19 airport lounges by the summer of 2012. However, the company was unable to honor the commitment, which was valued at over USD 250 million. The opening of new airport, being constructed at a cost of an estimated USD 15.5 billion, has now been delayed to the second half of 2013.
The delay is likely to dent Qatar Airways expansion plans, resulting in significant revenue losses, higher construction costs, delay penalties and causing inconvenience to passengers. The airline has severely criticized LDI’s handling of the project terming it “extremely poorly” due to which construction targets could not be achieved.
The airline has, therefore, terminated LDI’s contract and intends to file the lawsuit. Qatar Airways CEO Akbar Al Baker stated that, “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”.
The new airport was central to Qatar Airways future expansion plans as the current facility does not offer capacity to grow. The existing Doha International Airport handles almost 20 million passengers a year, out of which more than 80 percent of the traffic is generated by Qatar Airways. In phase one of the opening, the new airport is likely to handle over 28 million passengers annually. After becoming fully operational in 2018, the new airport is expected to double its capacity of handling passenger traffic.