AirAsia: One Scandal Too Many, Or Too Big For Mahathir’s Malaysia To Let Fail?

The affair could also scupper a much-discussed merger between AirAsia and Malaysia’s struggling flag carrier Malaysia Airlines

(SCMP) – AirAsia has gone from strength to strength despite a series of controversies over the years – and while Prime Minister Mahathir Mohamad has thrown the government’s support behind it once again, is there now too much turbulence for the scandal-ridden Malaysian carrier to stay aloft?

The budget airline last week faced bribery allegations that came to light after planemaker Airbus settled a corruption investigation into employee conduct by Britain’s Serious Fraud Office by paying US$4 billion in fines.

With Malaysia’s anti-corruption authorities and Securities Commission looking into the matter, questions abound not just as to the future of AirAsia, but whether a much-discussed potential merger between it and flag carrier Malaysia Airlines will come to fruition.

The British antifraud watchdog said Airbus had paid a bribe of US$50 million in the form of a sponsorship for a racing team owned by top officials from AirAsia and its long-haul sister company AirAsiaX, in return for an order for 180 planes, later changed to 135.