Eran says Airbus shares blame for soured deal amid corruption scandal


ECONOMYNEXT - Airbus Industrie, which made a controversial sale of A350 aircraft to loss-making state-run SriLankan Airlines which the airline has found unsuitable, also bears responsibility for the sale, State Minister for Finance Eran Wickremeratne said last week.

State-run SriLankan Airlines bought over a dozen A350 and A330 aircraft from Airbus Industrie and leasing company AerCap in deal valued at over two billion US dollars.

The deal was struck during the latter stage of the ousted Rajapaksa administration.

Three A350s leased from Aercap have already been cancelled by paying a penalty of over 100 million dollars. Sri Lanka now wants to cancel the balance four A350 aircraft.

A team from Airbus is due in Colombo for negotiations.

"Airbus Industrie in France also has a responsibility," State Minister for Finance Eran Wickremeratne said at an economic policy forum organized by Advocata Institute, a Colombo-based think tank.

"Sellers and buyers both have responsibilities."

The comments came amid a widening corruption scandal involving the sale of Airbus civilian and military aircraft, with Britain’s serious fraud office starting a probe over allegations that agents were used to pay bribes.

An inquiry ordered by Sri Lanka’s administration in 2015 recommended a criminal investigation into the Airbus purchase.

"The former government of President Mahinda Rajapakse made management changes to carry out a re-fleeting of the airline with brand-new aircraft costing $2.3 billion despite the availability of more cost effective alternatives," a government statement said at the time.

Wickremeratne said Airbus had sold the wide bodied planes with a very long range to an airline which had relatively shorter routes. SriLankan flew from Colombo to Europe and East Asia, but the A350 could fly non-stop to the US from Colombo.

The then chief executive of the airline has already been replaced along with the previous board but no one had been prosecuted yet.

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