Airbus Is Under Investigation For Bribing AirAsia With $50 Million To Win Orders

Malaysia’s anti-graft agency is investigating allegations that Airbus paid a bribe of $50 million to AirAsia.


Airbus is now under investigation for supposedly bribing AirAsia, the largest airline in Malaysia, with $50 million to win aircraft orders.

The deal supposedly included 180 aircraft:

  • 55 Airbus A330neos unveiled in 2014 plus earlier agreements for 25 A330s, 64 A320neos and 36 A320s.

However, AirAsia has denied these allegations:

“AirAsia vigorously rejects and denies any and all allegations of wrongdoing,” it said.

“The entering into of each aircraft purchase agreement was never made by any single individual decision, but instead arrived at through careful evaluation, deliberation and the collective decision of the board members after taking into account technical specifications, aircraft flight performance and operating economics,” AirAsia said in a statement.

AirAsia already has a ton of aircraft in its pure-Airbus fleet (274 aircraft) and many more on order.

In total, AirAsia itself (excluding subsidiaries) has a total of 353 A321neos on order, 2 of which have already been delivered.

AirAsia’s long-haul subsidiary, AirAsia X, has 78 A330-900neos and 30 A321XLRs on order.


Airbus on Friday agreed a record US$4 billion settlement with France, Britain and the United States after prosecutors said it had bribed public officials and hidden the payments as part of a pattern of worldwide corruption.

The deal allowed Airbus to avoid criminal prosecution that could have led to it being barred from public contracts in the US and the European Union.

Sources

https://www.reuters.com/article/us-airbus-probe-airasia/malaysia-probes-allegations-that-airbus-bribed-airasia-bosses-idUSKBN1ZV3LV
https://www.scmp.com/news/asia/southeast-asia/article/3048559/airasia-denies-corruption-airbus-order-malaysia-probes

Pretty interesting… I’ve always wondered why AirAsia needed so many aircraft. Since the news, AirAsia’s stock has been declining. If this is true, it would create a bad image for Airbus.

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I heard about this. Massive shame for Airbus to do such a thing. They also bribed governments for military orders, and paid government officials or airline executives (or people in both positions) to gain orders including at Garuda.

I have also heard Boeing went around and had talks with airlines to keep their support for the 737 MAX and possibly order more aircraft to boost perception and popularity, even after airlines such as Gaurda announced cancellation of their orders. Not as bad as bribing obviously.

Btw, I guess we can raise this question: if Airbus did bribe AirAsia for the order, why didn’t they just give a big discount for the big order instead?

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Wow! Shame on them!!

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I like the question, Boeing lost a case against Bombadier for discounting their A220-to-be.

But bribing is wrong, I wonder what the consequence will look like for Airbus.

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In response to this, AirAsia is one of the fastest growing airlines in the world and definitely needs those aircraft. They fill them all up and drag down the costs operating on such a large scale. I think Airbus’ bribe was to influence AirAsia’s decision between choosing Airbus or Boeing in order to secure a deal and encourage other airlines to order the neo, as the 737 MAX is a very cheap aircraft.

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Never really expected Airbus to do this. I’ve also been noticing that aviation companies cutting corners recently
Boeing - 737 MAX

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American companies cannot bribe anyone. It’s very illegal under the Foreign Corruption Act, and if they’re caught the US enforces this law very quickly.

Yeah, but the 78 A330neo order seems rather overkill. Not sure what they’d honestly do with them, and if they have ambitious expansion plans to grow their sort of small long-haul network.

image

Last I heard, I think they were interested in relaunching London and adding Paris, along with launching flights to Los Angeles.

How much can Malaysia’s market even grow? Additionally, there’s also the possibility of the Malaysia Airlines takeover in the near future. In 2018 AirAsia had a 50% market share while Malaysia Airlines had a 21%. Though, reducing competition will likely help them grow.

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Who said any country’s companies could bribe companies or governments? The EU especially takes things very very seriously.

Not at all for AirAsia. You should look at their stats.

No one in this conversation but bribing governments and organizations does happen, we can go through a whole list of recent cases in the US and discuss how the US punished them but thats for a different talk.

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They currently have like what, 36 A330-300s?

With the XLR and A330neo order, that’ll bring their long-haul fleet count to 144 aircraft, a 400% increase.

Not sure what they’d do with all of those aircraft… I don’t believe any A333s are scheduled for retirement either.

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Who would’ve thought that Airbus would bribe…dang! Now this is surprising news!

This is rather disappointing - now both of the world’s major airplane makers are in rather sticky situations.

hmm… this is interesting! Would like to see how this plays out, if Airbus did bribe AirAsia then that wasn’t a good move, everything comes out sooner or later, if they didn’t then…

It looks like SriLankan and Avianca were also bribed by Airbus…



https://www.ft.com/content/f7a01a60-442b-11ea-abea-0c7a29cd66fe

You can’t forget the AirAsia subsidiaries in multiple countries they are ordering aircraft for. They could go into the Thai, Japanese, Indonesian, Philippine or Indian fleets to expand internationally in those markets.

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Sadly this sort of stuff is all too common in the aerospace and military industry. When you are talking about billion dollar deals, it’s tempting for them to engage in such actions. Rolls Royce recently was embroiled in such as scandal recently. Here’s hoping for more ethical business practices!

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Still not as bad as the Max. Companies do this all the time. This is how they make money and gain popularity.

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Not the Japanese fleet though - as that doesn’t exist.

This really wasn’t expected from Airbus, they have let me down 😕

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