Airbus Agrees to $4 Billion Settlement in Alleged Bribery Scheme

The scandals keep on coming for aircraft manufacturers

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Airbus' massive settlement was related to accusations of bribery.
Airbus

With the 737 Max 8 crisis still looming over Boeing, you’d think its only competitor Airbus would be benefitting—but the French airplane manufacturer was hit with its own bad news today.

Airbus announced that it has agreed to pay $3.99 billion in global penalties over allegations of “foreign bribery”—payments made to officials to win foreign contracts. The settlement was reached between Airbus and prosecutors from the U.S., U.K. and France.

“Airbus engaged in a multiyear and massive scheme to corruptly enhance its business interests by paying bribes in China and other countries, and concealing those bribes,” said Assistant Attorney General Brian A. Benczkowski of the Department of Justice’s Criminal Division in a statement.

According to court documents, Airbus used “third-party officials to bribe government officials” as well as foreign airline executives around the world. The airplane manufacturer is alleged to have made “illicit payments to middlemen” in China, South Korea, Russia, Japan and Colombia, as well as other countries, The Wall Street Journal reported. The settlement covers allegations between 2004 and 2016.

Aviation expert Seth Kaplan called the settlement “a lot of money. It’s not a slap on the wrist. In other words, the allegations were credible.”

For comparison, Boeing will see losses totaling $18 billion as a result of the continued grounding of the 737 Max 8, which has been banned by the FAA and international aviation agencies since March of last year after two fatal crashes.

In the wake of Boeing’s disastrous 2019, Airbus has largely benefitted: The company delivered more aircraft than in 2018 and generated more revenue. The 737 Max 8’s grounding has also bucked the conventional wisdom of airline purchasing, which was that a fleet should consist of the same aircraft. (For example, in November the pilots union for one of Boeing’s biggest customers, Southwest Airlines, suggested the airline should consider purchasing planes from a different manufacturer.)

“We’re seeing a diversification of a fleet as a virtue,” Kaplan added. “It’s mostly what Airbus hasn’t done that’s made the difference, by the absence of awful news.”

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