Corruption Costs: Sri Lankan Airlines Demands 4 Free Airbus A330-900s & More In Compensation

GON

GON

$150 Site Donor 2025
Joined
Nov 28, 2014
Messages
10,503
Location
White Sands, NM
Interesting article.

Appears confirmation that a Sri Lanka airline CEO accepted a $2 million USD kickback to purchase Airbus passenger aircraft. Years later, this kickback was discovered. The current Sri Lanka airline CEO is demanding four Airbus wide body aircraft as part of the compensation for Airbus paying a kickback.

https://simpleflying.com/corruption-costs-sri-lankan-4-free-a330-900s/
 
wait so the one ceo got a kickback and the new one is jealous and wants one too??

Tell them well just pay us the 2mil back and we are even? 😂



Edit: yes I know that doesnt make 100% sense.
 
Rand said:
wait so the one ceo got a kickback and the new one is jealous and wants one too??

Tell them well just pay us the 2mil back and we are even? 😂



Edit: yes I know that doesnt make 100% sense.
Click to expand...
It is more likely than not the $2 million USD meant Sri Lanka airlines paid considerably more than they should have for their aircraft order, and/or the terms and conditions of the sale were not as advantageous as could/ should have been.
 
GON said:
It is more likely than not the $2 million USD meant Sri Lanka airlines paid considerably more than they should have for their aircraft order, and/or the terms and conditions of the sale were not as advantageous as could/ should have been.
Click to expand...
yes thats why I pre-edited my post before you posted
but to ask for 4 planes... uh what's that saying wish in one hand....
 
  • Like
Reactions: GON
While Airbus should be a little red-faced over this and the EU may need to investigate, there is no way on this earth that Sri Lankan is either entitled to or is going to get four free factory new A330s as compensation.
Maybe if they had approached Airbus privately they could have gotten some sort of deal, although not free aircraft, but there is now no chance of that and they've put Airbus in the position of ignoring any future RFPs from them.
 
wwillson said:
The US has the Foreign Corrupt Practices Act. If an American company got caught paying a kickback, someone at the American company would likely go to jail.
Click to expand...
Just curious on last time a person was prosecuted and jailed under this Act?
I see a lot of fines, which to many companies is just the cost of doing business in locales such as Sri Lanka.
 
WobblyElvis said:
I think you will find the FCPA is no longer in force. How are we to get things done without a good bribe...
Look it up, it's on "pause"
Click to expand...
Well, it is important for US companies to compete with equal footing to non-USA companies.
If the Act was in force, no way there would be a level playing field as shown by the Airbus deal.

Early in my career I was in daily competition with another company - a local Canadian company. I worked for PepsiCo. I could not make progress in a key account. Suspected what it was but no proof. We eventually merged with our competitor. I ended up with that account. First thing the manager said on my first sales call. Where's my free product the other company would give me every order. It was 1 free with 10. He could pocket the money as it was never on the books. Probably worth $200-300 a week, not bad money in the 80s. especially if you did that with multiple companies. Never did give him the extra he wanted, and he put me in the penalty box. Whatever, I just went and got the sales elsewhere.
Not a fair paying field, my example of bribery and corruption.
 
wwillson said:
The US has the Foreign Corrupt Practices Act. If an American company got caught paying a kickback, someone at the American company would likely go to jail.
Click to expand...
I'm aware of the FCPA. I can find no EU or applicable European country national law that would have made it illegal for Airbus to have bribed a foreign commercial entity at the time. Does anyone know of any applicable EU, Dutch or French law?
Ironically, one of the examples of corrupt activity that was cited in hearings that led to the enactment of FCPA involved a civil aircraft deal, in this case Lockheed's bribing Prime Minister Tanaka as well as others to aid it in gaining an L-1011 order from ANA.
 
What I find ironic & somewhat perplexing is that nobody is going after the previous CEO.
If anybody has done "business' in any of those countries that person ought to know that
any contract starts with"What's in it for me" On 2nd thought I think I answered myself in the 1st line!
 
wwillson said:
The US has the Foreign Corrupt Practices Act. If an American company got caught paying a kickback, someone at the American company would likely go to jail.
Click to expand...
There are many ways to get around this. It could be we sell to someone then other companies pay a kickback. It could also mean someone in their government got a foreign aid or political pressure from military vendors to bundle up some deals, etc. Aerospace is never 100% commercial and always somewhat geopolitical involved.
 
Oh, for crying out loud…

When I think of Airlines with substantial orders, and potential leverage with a supplier like Airbus or Boeing because of those large orders, I wouldn’t exactly put Sri Lankan at the top of the list.

When United, for example, orders 100 airplanes, they get leverage - they don’t pay “retail”. That’s an airline with 1,000 aircraft in the fleet and several hundred on order.

They’re a serious customer - they have leverage, and the ability to negotiate.

But these guys?

With a total fleet size of 22 aircraft?

Yeah - not a ton of leverage from which to extract anything from any supplier.
 
You must log in or register to reply here.
Back
Top Bottom