AirAsia’s Chairman And CEO Temporarily Step Down

Following Airbus’ record-breaking $4bn settlement in relation to bribery allegations, further information has come to light that implicates AirAsia as a beneficiary of a bribe. As a result, Air Asia CEO Tony Fernandes and Chairman Kamarudin Meranun will temporarily step down from their roles at the low-cost carrier. AirAsia strongly denies any wrongdoing.

Air Asia airbus
AirAsia executives will step down temporarily amid the Airbus bribery scandal. Photo: AirAsia

AirAsia caught up in Airbus bribery scandal

In the wake of the Airbus bribery scandal, budget airline Air Asia is facing allegations that it was paid by the planemaker to buy its aircraft. The alleged bribe was worth $50m, and was in return for Air Asia placing a 180 aircraft order from Airbus.

In order to expedite the review of these allegations, both the CEO and the Chairman of Air Asia’s board will step down from their roles temporarily. Both Tony Fernandes and Kamarudin Meranun will distance themselves from the airline for a period of at least two months while the investigation is ongoing.

Tony Fernandes
AirAsia’s enigmatic CEO Tony Fernandes denies any wrongdoing. Photo: Getty

Stepping into the acting CEO role is senior executive Tharumalingam Kanagalingam. These changes are thought to be taking effect immediately. Reuters reports, however, that both personnel will remain advisers to the airline, “in view of the current difficult economic circumstances facing the airline industry.”

Now, a committee made up of non-executive members of the board will undertake a review of the allegations and will take any necessary action that comes out of the review. AirAsia said in a statement carried by The Edge,

“The committee’s main objective will be to review the allegations therein so far, as it concerns AirAsia Group Bhd, and to take any necessary action based on the review.”

Air Asia rejects allegations

The airline has denied the allegations of bribery, saying it ‘vigorously rejects’ claims that it received a payoff to buy 180 aircraft from Airbus. The specifics of the allegations were revealed as part of the $4bn settlement that Airbus has agreed to with the US, France and the UK.

The allegation concerns a sponsorship deal for the Caterham F1 racing team, which was founded by Air Asia’s Tony Fernandes and the ex-parent of Airbus, EADS. Britain’s Serious Fraud Office (SFO) said that, between 2013 and 2015, EADS paid $50m in sponsorship for the racing team which was owned by two people it names only as ‘Air Asia executives’.

AirAsia
AirAsia is a major Airbus customer. Photo: AirAsia

The SFO describes the two incriminated parties as ‘key decision makers’ in AirAsia and AirAsia X, and accuses them of being “rewarded in respect of the order of 180 aircraft from Airbus.”

However, AirAsia and, in particular, Kamarudin and Fernandes vehemently deny the allegations. Their statement, as published on Focus Malaysia, said,

“We categorically deny any and all allegations of wrongdoing or misconduct on our part as directors of AirAsia. We would not harm the very companies that we spent our entire lives building up to their present global status.”

The Malaysian Anti Corruption Commission (MACC) has also initiated its own investigation into the allegations, and is said to be in contact with the SFO in the UK.

This disruption couldn’t have come at a worse time for AirAsia. The airline is, along with many others, already struggling from the lack of demand for travel in the region in the wake of the coronavirus outbreak.

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