Talks with Airbus on $ 1b claim

SriLankan Airlines Chairman Ashok Pathirage said this week that negotiations with Airbus on a US$ 1bn claim over damages, loss of reputation as well as reimbursement of costs and interests has “progressed very well”.

The national carrier sued Airbus last year following information revealed in a judgment of the Crown Court of the United Kingdom approving the Deferred Prosecution Agreement between

Britain’s Serious Fraud Office and Airbus SE.

SriLankan has demanded the cancellation of the purchase agreement for four A350900 aircraft, among other claims. England’s High Court in 2020 fined Airbus a record £3bn in penalties for paying huge bribes on an “endemic” basis to land contracts in 20 countries. One is Sri Lanka and involves the purchase of six A330 and four A350 airbuses and the lease of four other planes in deals agreed to between 2012 and 2013.

The Yahapalanaya regime subsequently paid a US$ 98mn penalty for canceling the four Airbus A350s. In SriLankan Airlines’ claim against Airbus, it maintained that the deal was null and void as a bribe was paid, Mr Pathirage said.

“The Airbus negotiations (are taking place) at a high level,” he revealed to COPE on Monday. “At the moment, Airbus has agreed to sit and talk with us so probably we feel there’s a settlement but we don’t know what it is. We are handling that in a very professional manner. We have got two quantum experts to support us overseas, to quantify our claim and to come back to us on practically how much we could expect out of this.”

Among what SriLankan has demanded is to wipe out the US$98 million cancellation penalty. “We feel the deal was null and void because they [Airbus] paid a bribe,” Mr Pathirage said. “That is an accepted thing in the UK court. I think we feel there is a real claim there and Airbus is also coming to the table to discuss.”