Airbus Internal Audit Reveals No Slush Funds Found

An internal audit of Airbus sales campaigns, ordered after allegations of slush funds appeared in news reports, turned up no irregularities, parent company EADS said Tuesday.

Meanwhile, several thousand workers demonstrated in Toulouse, France, on Tuesday for a third time to protest a restructuring plan at Airbus that would cost 10,000 jobs in Europe, 4,300 of them in France. The demonstration came a day before unions meet with Airbus chief Louis Gallois, who is co-chairman of the European Aeronautic Defense and Space Co.

The internal audit was carried out in response to a March 21 news report alleging that the French secret services had suspected EADS of maintaining a slush fund to pay bribes to win contracts.

EADS said an internal audit of the sales campaigns of Airbus, EADS' commercial aircraft subsidiary, confirmed that they complied with both internal and international regulations and that no irregularities were found.

The article, in the weekly newsmagazine L'Express, alleged that Airbus had used bribes to win aircraft orders in the United Arab Emirates and in Libya. It did not suggest any link to executives.

Another article on the same day in the monthly magazine Capital claimed that Gallois had been summoned to the presidential Elysee Palace to discuss issues raised in the report by the DST intelligence service.

Officials have denied the existence of such an intelligence report.

EADS said its board, which met Monday, "took notice of the results of this audit," adding that the company routinely audits projects and programs run by its various divisions.

EADS and Airbus have worked to restore the image, finances and morale of the plane maker, which has been hit with a two-year delay in production of the A380 superjumbo.

But Airbus has declined to soften its Power-8 restructuring plan meant to make up for losses caused by the weak dollar and a $6.5 billion profit shortfall because of the delay in rolling out the superjumbo.

Union officials said that 4,000 people took part in the demonstration, a march that ended at the assembly plant for the A380 superjumbo, the focal point of Airbus' woes. Police said 2,500 participated.

Also Tuesday, Oman Air, the Middle East country's national airline, said it reached a preliminary agreement to buy five Airbus widebody A330-200 jets and plans to spend as much as $500 million on the aircraft to expand its service.

"We have signed a letter of intent to buy five planes from Airbus," said Ziad Karim al-Haremi, chief executive officer of Oman Aviation Services, the parent company of Oman Air. "We are buying the planes for long-haul expansion."

Deliveries will begin in 2009, and the company plans to lease aircraft in the interim to begin flying to London, Paris, Frankfurt, Munich, Milan, Stockholm, Bangkok, Kuala Lumpur, Jakarta and Singapore. This report includes information from The Associated Press and Bloomberg News.

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