FARNBOROUGH (Reuters) - Nine years after France’s top plane executive shook hands in Baghdad on a $500 million (249 million pound) deal to sell airliners to the government of Saddam Hussein, Airbus finally conceded on Thursday the deal was off.
Airbus sales chief John Leahy ordered the deal removed from its backlog in response to an inquiry from Reuters about the long-forgotten deal at this week’s Farnborough Air Show.
The deal to supply five A310 passenger jets had been on the Airbus order book since its then director Jean Pierson clinched the deal in 1989, as Iraq’s skies reopened following travel curbs imposed during its eight-year war with Iran.
The technical status of the order from a defunct sovereign government was unclear, but Airbus has anyway stopped making the A310. The engines on the planes would have been supplied by U.S. supplier Pratt & Whitney, part of United Technologies (UTX.N).
The 240-seat planes were sold at a time when French-led businesses were doing significant business in Iraq, which had good relations with France and several western countries until its invasion of Kuwait in August 1990.
Airbus was then a four-nation consortium headquartered in France and is now part of aerospace group EADS EAD.PA.
Iraqi forces were ejected from Kuwait by a U.S.-led coalition including the French in 1991. Saddam was ousted in a second U.S.-led invasion in 2003, this time opposed by France, and was hanged in December 2006 for crimes against humanity.
Post-Saddam Iraq returned to the market for new airliners earlier this year when it awarded a $2.2 billion deal to buy 30 airliners to Airbus’s arch-rival Boeing Co (BA.N). Leahy complained that Airbus, Boeing’s main global rival, had not been allowed to bid for that contract.
“We were never asked for a quote, which is extremely unusual for an order of that size,” he said. “At the very least it is not a great negotiating tactic; by offering exclusivity, you don’t usually get the best price.”
A Boeing spokesman had no immediate comment.
The Boeing plane contract is among a number of flagship deals awarded to American companies following the U.S. invasion that toppled Saddam in 2003.
France opposed the second invasion, souring relations with U.S. President George W. Bush which have only recently improved as President Nicolas Sarkozy steers France towards a more pro-Washington course following his election last year.
Editing by David Holmes