Ethics and Airbus
1. In each of the cases who benefits and who suffers from the alleged ethical and legal lapses of Airbus?
The case study shows that politics play a major role in ordering the aircrafts from the manufacturers. Kickbacks are encouraged not only by the politicians but the manufacturers as well.
In the first case in Belgian where Sabena orders 17 Airbus planes and later increases the order to 34 which it did not need at all. It’s this move helped trigger airline’s collapse four years later its order. A former Sabena manager agrees to this, “It was a fatal decision”. A Belgian report also confirms that that the Airbus order was a big cause of Sabena’s collapse. Thus, in this case it is obvious that Sabena suffered.
In the Kuwaiti kickbacks case, Kuwait Airways Corporation (KAC) chairman Al Mishari announced an order of 15 Airbus airplanes worth $1.1 billion. Later Airbus chipped in $450,000 to set up and provide the running costs for the Aviation Lease and Finance Company (ALAFCO). But later due to Kuwait Finance Ministry’s watchdogs, the deal was never sanctioned. Thus, in this case Airbus suffered.
In India, Indian Airlines had ordered 19 Airbus A320s worth $952 million in 1986. But there was an FIR launched and the case is going on till date. During this case Boeing offered to supply up to 35 of its 737 aircraft with a discount of $5 million per plane. This offer would have reduced IA’s investment by $140 million but IA did not take it obviously due to the “commissions” offered by Airbus. In March 2000, IA’s board approved an order for 43 Airbus planes, worth around $2 billion. The order needs government approval but being an Indian I know for a fact that the investigation is going to go nowhere and India will continue to buy planes from Airbus. Thus, very evidently Airbus benefited from this case.
In Canada, Airbus sold 34 aircrafts for around $1.5 billion so it naturally benefited in Canada.
Only one case regarding the Airbus kickbacks had led to a
The case study shows that politics play a major role in ordering the aircrafts from the manufacturers. Kickbacks are encouraged not only by the politicians but the manufacturers as well.
In the first case in Belgian where Sabena orders 17 Airbus planes and later increases the order to 34 which it did not need at all. It’s this move helped trigger airline’s collapse four years later its order. A former Sabena manager agrees to this, “It was a fatal decision”. A Belgian report also confirms that that the Airbus order was a big cause of Sabena’s collapse. Thus, in this case it is obvious that Sabena suffered.
In the Kuwaiti kickbacks case, Kuwait Airways Corporation (KAC) chairman Al Mishari announced an order of 15 Airbus airplanes worth $1.1 billion. Later Airbus chipped in $450,000 to set up and provide the running costs for the Aviation Lease and Finance Company (ALAFCO). But later due to Kuwait Finance Ministry’s watchdogs, the deal was never sanctioned. Thus, in this case Airbus suffered.
In India, Indian Airlines had ordered 19 Airbus A320s worth $952 million in 1986. But there was an FIR launched and the case is going on till date. During this case Boeing offered to supply up to 35 of its 737 aircraft with a discount of $5 million per plane. This offer would have reduced IA’s investment by $140 million but IA did not take it obviously due to the “commissions” offered by Airbus. In March 2000, IA’s board approved an order for 43 Airbus planes, worth around $2 billion. The order needs government approval but being an Indian I know for a fact that the investigation is going to go nowhere and India will continue to buy planes from Airbus. Thus, very evidently Airbus benefited from this case.
In Canada, Airbus sold 34 aircrafts for around $1.5 billion so it naturally benefited in Canada.
Only one case regarding the Airbus kickbacks had led to a