Avianca is performing an internal investigation into allegations that it bribed government officials from several nations with free tickets and upgrades.
While the list of nations has not been disclosed, such conduct, if verified, runs afoul of both the U.S. Department of Justice and the Securities and Exchange Commission. The law subjects foreign companies to sanctions if they are traded in a U.S. stock exchange and found to have bribed government officials.
An SEC filing noted:
Avianca Holdings is cooperating with both agencies. Based on the progress of the matter to date, management has not provided for any potential liability that may result from the investigation or related regulatory proceeding.
Avianca admits that is has given away free tickets and upgrades; the question is whether those constituted bribes, explicitly or implicitly. It seems virtually impossible (to me at least) to argue such gifts are not at least implicit bribes.
In any case, Avianca says it has “now” discontinued the practice.
Avianca is under new management after United Airlines forced out German Efromovich over his default on a United-backed loan. While United has not fully acted by seizing shares, it pushed for the appointment of a new chairman.
Bribing government officials is hardly a new trick. Still, for an airline that seeks a modern, dependable, and trustworthy image, this news is not helpful. Then again, I don’t see it as much different than airlines trying to court influence by gifting status to politicians (hello Delta…).
Have you noticed any questionable upgrades when flying Avianca?
image: Avianca stock photo (not necessarily a government official!)