MIAMI – Airbus has reached agreements with fraud authorities in France, the United Kingdom, and the United States, to pay €3.6 billion amid investigations of bribery and corruption in the company.
According to FlightGlobal, analysis from Airbus estimated the damaging impact could have reached around €200 billion across all divisions of the company.
The payment made by Airbus will finally bring to an end the three-year prosecution arrangement, which would have avoided more money in lawsuits and also employee satisfaction.
France will receive two billion Euros, with the UK receiving €984 million, with the U.S Department of Justice receiving €526 million and the Department of State receiving nine million.
Commenting on the news was Denis Ranque, the Chairman at Airbus, who accepted that the practices of the past need to change. “The settlements we have reached today turn the page on unacceptable business practices from the past. The strengthening of our compliance programs at Airbus is designed to ensure that such misconduct cannot happen again”.
Airbus’ CEO Guillaume Faury added to Ranque’s comments, saying that “the lessons learned enable Airbus to position itself as the trusted and reliable partner we want to be”.
The U.S. Department of Justice added in its agreement that it will suspend prosecution of Airbus for three years, with it to be “discontinued if Airbus complies with the terms of the agreement during this period”. This move was similar to the likes of the UK and France accordingly.
Airbus was accused of failing to prevent bribery, with the probe that was sent forward by the relevant countries covered 1,750 different entities.
One of the biggest factors in these allegations was for the securing of significant orders and to also increase the brand strength of the company overseas.
It is understood, that estimates from the likes of Deloitte, a financial firm, would have affected the GDP’s of Germany, UK, France and Spain by around one hundred billion Euros, emphasizing the sheer size of those investigations.
Airbus Avoiding The Cliff-Edge?
If Airbus decided to continue fighting and try and beat the case in court and lost, then it could have been banned from tendering contracts, which would have affected the company for up to 15 years.
That would have placed Airbus into a position where it would be hemorrhaging money, whether it would be paying out compensation claims to customers who are waiting for aircraft, to those in the supply chain who rely on the investment of Airbus for their job security.
It remains clear that it has been able to avoid the cliff-edge, and that paying the €3.6 billion fine is a bite on the bullet—but could have been so much worse.
With the backlog that the manufacturer currently has, it will be able to make that money back over the next few years.
For the American side, at least, it will be a significant win, especially with all of the media collateral damage being sent to the Seattle-based manufacturer with the 737 MAX crisis.