Wednesday, October 28, 2020

Colombia’s Avianca airline probe relationship with Airbus amid bribery scandal


Colombian carrier Avianca has engaged a law firm to conduct an independent internal investigation into its relationship with Airbus, after the airline was linked to the extensive probe into alleged bribery involving the airframer.

French authorities have disclosed that Airbus orders from airlines including Avianca, Air Arabia, Korean Air, China Airlines, and Nepal Airlines have been scrutinised as part of the probe into the manufacturer’s alleged failure to prevent bribery.

Airbus has agreed to pay a €3.6 billion fine to settle the case of which the majority, nearly €2.1 billion, has been imposed by the French judiciary – comprising a profit disgorgement of €1.05 billion and a penalty of €1.03 billion.

The French statement of facts issued as part of the judicial public interest agreement by the Parquet National Financier lays out evidence to back its allegations.

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Its probe into the Avianca relationship focuses on the circumstances surrounding its order for 100 A320neo aircraft in 2015.

Avianca says it has retained the law firm Ropes & Gray to carry out an internal investigation into its relationship with Airbus and whether it has been the “victim of wrongdoing”. The company adds that it will “fully collaborate” with relevant authorities.

“Airbus’s disclosure contains deeply concerning information regarding alleged actions by an individual at Avianca in the period prior to March 2016,” says Avianca Holdings president Anko van der Werff.

“Our current management team strongly rejects any conduct that does not reflect integrity and transparency in business in general, and in particular towards Avianca.”

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The French documentation expresses suspicion over Airbus activity during a campaign for China Airlines, which ordered A350s in 2008.

It refers to the airframer’s contemplating “several legal and financial arrangements whose complexity and opacity were clearly intended to allow the transfer of funds in complete discretion”.

The documentation also refers to evidence of “concealed compensation” in consideration of early A320 orders from United Arab Emirates budget carrier Air Arabia, as well as alleged payments which followed A330 orders from Korean Air in the late 1990s.

Korean Air claims it “does not know” about the Airbus case. “We have not been questioned or informed of anything related to the investigation from the US, the UK, and the French government nor from Airbus,” says a spokesman for the carrier.

Activity linked to a Nepal Airlines order for Airbus jets has similarly been highlighted.

For each of the cases outlined, the Parquet National Financier says it “considers that these facts could constitute the offence of bribery”. Air Arabia, China Airlines, and Nepal Airlines have yet to comment on the allegations against Airbus.



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