
Press reports expect Airbus to face $3.3 billion in costs to settle disputed with regulatory bodies
- Press reports expect Airbus to face $3.3 billion in costs to settle disputed with regulatory bodies.
- Airbus traded 2.3% higher in early trading but has remained flat on average in January.
- Airbus fired over 100 workers found in violation of ethics or other relevant compliance issues.
- Airbus recently beat Boeing to become the world's largest airplane manufacturer.
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World’s largest airplane manufacturer, Airbus, is currently under scrutiny from multiple regulatory authorities across the globe. While the British and French authorities are investigating the company for allegations of corruption regarding jet sales, the United States has accused the company of having violated the export controls.
In a recent announcement, Airbus declared its willingness to settle the disputes with the authorities. Representatives, however, refrained from divulging the details of such settlements including what it is likely to cost for the plane manufacturer. Press reports, however, estimate valuation of around $3.3 billion for settlements.
Airbus Traded 2.3% Higher In Early Trading
Copy link to sectionDespite the aforementioned complications, Airbus is performing fairly well in the stock market as analysts and investors are confident of the manufacturer’s ability to contain the damage with the recently finalized deals. In early trading, the stock was seen trading 2.3% higher.
Jefferies’ analysts commented on the press reports and warned the investors that the current estimate of $3.3 billion in costs associated with the settlements is closer to the upper limit that they had previously forecast for the disputes. Bank of America’s trader’s note also suggested on Monday that Airbus’ willingness to settle the disputes goes a long way in removing the negative overhang from the company’s stock.
Following the corruption allegations, Airbus had launched an internal investigation as well, following which, as many as 100 workers have been fired that were found in violation of the company’s ethics or relevant compliance issues.
Airbus was accused of making inaccurate declarations to the UK based agency for export credit finance regarding the payments that the company made to the sales agents. Following the accusation, SFO had launched an investigation against Airbus in August 2016 with PNF joining the league at the start of the next year.
Airbus Beats Boeing To Win The Title Of World’s Largest Plane Manufacturer
Copy link to sectionAirbus is under another probe in Germany as well over an allegation of misusing the client’s documents.
Despite the ongoing complications, Airbus is not as strongly struck as its staunch rival, Boeing, that has its widely popular, fuel-efficient 737 Max jetliner grounded since March 2019 after two fatal crashes that killed 346 people. Boeing has recently lost its long-held title of being the world’s largest plane manufacturer to Airbus.
Airbus performed flat on average in the stock market in January. It opened the new year at around €133 and is currently exchanging hands at €134.60 at the time of writing.
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