AIRBUS SE would have stood to lose more than €200 bil (RM906 bil) in revenue across all divisions, according to the European planemaker’s own “worst-case” estimates, if the company was convicted of bribery.
Airbus reached that conclusion after examining the value of contracts for which it could potentially be prohibited from participating in across its commercial aircraft, defence and helicopter segments, the effects of which could last up to 15 years, aviation publication FlightGlobal said in a Feb 6 report.
Conviction could have resulted in discretionary as well as mandatory debarment from tendering for public-sector contracts, the report added. “The airframer has agreed to pay a €3.6 bil (US$4 bil) fine to settle the case under a three-year deferred prosecution arrangement, a deal intended to avoid a costly fraud trial and potential collateral damage affecting the workforce.”
“What matters here is not the potential loss of contracts… but the effect this will have on the company financially and on its [innocent] employees, and the wider effects this will have on innocent third parties,” said the president of the UK High Court’s Queen’s Bench Division, Dame Victoria Sharp, regarding the case.
Such a considerable financial impact could leave “thousands” unemployed, at Airbus and its suppliers, across the 15-year time frame. Airbus’ market presence would also take a hit “given its position as one of the two players in a global commercial aircraft duopoly,” added FlightGlobal.
Airbus stood accused of failing to prevent bribery in a number of countries, including Malaysia, following an extensive investigation.
Among the beneficiaries of kickbacks, according to the UK court documents, were executives of Malaysia-based discount carrier AirAsia Group Bhd (AAGB) and its long-haul unit AirAsia X Bhd (AAX), who accepted US$50 mil (RM205 mil) in lieu of a sponsorship for a sports team linked to two unnamed AirAsia executives.
Airbus allegedly made the payment to secure an order for 180 aircraft. The documents also said Airbus employees attempted to pay an additional US$55 mil to the directors and/or employees of AAGB and AAX but were prevented by an October 2014 freeze on payments to agents and intermediaries.
According to a Reuters report on Feb 1, the allegations concern a 2012 sponsorship agreement between the now-defunct Caterham Formula 1 racing team, founded by AAGB boss Tan Sri Tony Fernandes, and Airbus’ then-parent, EADS.
Fernandes and fellow AAGB co-founder Datuk Kamarudin Meranun had stepped down on Feb 3 for two months to allow for investigations into the matter.
AAGB and AAX on Feb 5 announced that they would form a committee to review the UK court findings while regulators Malaysian Aviation Commission and Securities Commission Malaysia, as well as enforcement agency Malaysian Anti-Corruption Commission, have launched their own queries into the scandal.
Fernandes and Kamarudin have maintained their innocence. “We are all in shock. We did nothing wrong. But another challenge and we come back stronger,” the duo wrote in a Feb 3 memo to staff. – Feb 6, 2020
