Monday , February 17 2020

Airbus scandal spurs SriLankan Airlines to pursue compensation

Bloomberg

The government of Sri Lanka is considering ways of recovering damages, including claiming compensation from Airbus SE, after the European planemaker admitted to bribing executives to win aircraft orders.
“The reputational damage was huge, enormous,” Vipula Gunatilleka, chief executive officer of state-run SriLankan Airlines Ltd, said in an interview at the Singapore Airshow on Wednesday.
“That’s why our government is looking at certain remedial action.”
Airbus two weeks ago admitted to illegally trying to sway plane sales and agreed to a record $4 billion bribery settlement. That included bribing the wife of a SriLankan Airlines official, who received $2 million through a Brunei shell company, according to the UK‘s Serious Fraud Office.
Following the settlement, Sri Lankan prosecutors said Kapila Chandrasena, the ex-CEO of SriLankan, and his wife, Priyanka Niyomali Wijenayaka, were suspects in a money-laundering case linked to Airbus aircraft sales.
“It was shocking,”Gunatilleka said. “When you hold a public office, you expect people to be credible. That trust was breached.”
An attempt by the Sri Lankan government to sell a 49% stake in the carrier seems to be off the table, Gunatilleka said. The airline is restructuring, and that should be enough to revive its fortunes, he said.
“The previous government wanted to do it, but I don’t think they had a clear strategy,” Gunatilleka said.
“As such, the airline was losing money. Who’d invest, who was going to come and buy even if you want to sell?”
Sri Lanka revived the process of privatising the state-run carrier that is saddled with at least $1 billion of debt in 2018, a year after talks with sole bidder TPG Capital collapsed following due diligence of the struggling airline.

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