EU-China dispute 'delaying Airbus orders'

Aerospace firm chief believes tax on airliner carbon emissions has invited costly Chinese trade retaliation.

    Gallois says the Beijing-Brussels fight has put the fate of 45 unbuilt large Airbus aircraft in question [EPA]
     
    The chief executive of the Airbus parent company, EADS, has accused European Union officials of starting a fight with China over aircraft emissions that threatens to cost the jet manufacturer $12bn in orders.
     
    Louis Gallois said on Thursday that EADS is a "hostage" to the dispute between Beijing and Brussels, which has put the fate of 45 unbuilt large aircraft in question.

    "China is putting on hold orders already agreed with airlines but not approved. ... We are worried that this conflict is becoming a commercial war," he said.

    As Airbus could lose $12bn in orders, Gallois announced EADS reported a 72 per cent increase in profits for the fourth quarter to $810 million.

    With some analysts warning of a brewing trade war, Stefan Schaffrath, Airbus spokesman, said they were seeing "retaliation threats" from 26 countries, "in particular from China".

    Speaking to the Associated Press news agency, he said 35 orders by Chinese airlines for A330 aircraft are on hold because China's government is refusing to approve them.

    He said orders for another 10 A380 superjumbos are also under threat, and that the combined list prices of the aircraft is $12bn.

    Officials at the Chinese embassy in Paris could not be reached for comment on the Airbus statements on Thursday.

    System defended

    EU officials have defended the emissions system.

    Asked about the Airbus complaint, Isaac Valero Ladron, EU spokesman, said: "I'm not in a position to make any comments about possible trade decisions. I think it's in everybody's interest to reduce greenhouse gases, which affects climate change, and airplanes affect that, as well."

    The emissions trading system went into effect at the start of the year as part of European efforts to reduce global warming.

    Airlines flying to or from Europe must obtain certificates for carbon dioxide emissions. They will get free credits to cover most flights this year but must buy or trade for credits to cover the rest.

    The US, China, Russia, India and many other countries are opposed and say the bloc cannot impose taxes on flights outside its own airspace.

    China has said it prohibits its airlines from paying the EU fees, and in Washington, congress has voted to exclude US airlines from the emissions cap-and-trade programme.

    EU officials have said they acted unilaterally because of a doubling of aviation carbon emissions in Europe between 1990 and 2006, and the inability of governments to forge a global deal on reducing emissions.

    SOURCE: Agencies


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