Enders: China Has Already Suspended Airbus Orders Worth $12 Billion

In joint letters, Airbus, Air Berlin, Air France, British Airways, Iberia, Lufthansa, MTU Aero Engines, Safran and Virgin Atlantic have called upon Prime Ministers David Cameron (UK), Francois Fillon (F), Angela Merkel (GE) and Mariano Rajoy (Sp) to take action and stop an escalating trade conflict with China and other countries opposing the European Emissions Trading Scheme (ETS). In their letters, the nine CEOs confirm that as a response to European ETS, aviation related businesses are now faced with real concrete action with serious consequences on the European aviation business.

In many of the countries opposed to ETS, countermeasures and restrictions on European airlines are in preparation, such as special taxes and even traffic rights limitations. In China, approval for $12 billion worth of Airbus orders has been suspended. Airbus estimates that this will jeopardise more than 1,000 Airbus jobs in Europe and at least another 1,000 in the supply chain.

The nine CEOs fully expect the list of suspensions, cancellations and punitive actions to grow as other important markets continue to oppose ETS. They see the situation as becoming intolerable for the European aviation industry. "A situation that Europe can ill-afford in the current economic climate."

The CEOs therefore urgently request consultations at the level of the EU Council and, most importantly, with the States taking this retaliatory trade action. "The aim must be to find a compromise solution and to have these punitive trade measures stopped before it is too late."

"We have always believed that only a global solution would be adequate to resolve the problem of global aviation emissions. This solution can only be found in ICAO, which has recently appointed a high level dedicated group to propose a global framework for international aviation emissions by the end of this year," the CEOs claimed in their letter.

The CEOs reminded the governments that the aviation industry has always supported the need to increase the sustainability of worldwide aviation by reducing its environmental impact. Furthermore, aviation supports market based measures as one important means of achieving this goal. "As such, our industry remains in supporter of global Emissions Trading Schemes (ETS) applied to aviation."

The CEOs urge the Prime Ministers to use their influence in the ICAO Council to find an acceptable solution within as short a time frame as possible and offer industry's support in providing resources to make this possible.

The CEOs are:

• Airbus: Tom Enders
• Air Berlin: Hartmut Mehdorn
• Air France: Alexandre de Juniac
• British Airways: Keith Williams
• Iberia: Antonio Vazquez
• Lufthansa: Christoph Franz
• MTU Aero Engines: Egon W. Behle
• Safran: Jean-Paul Herteman
• Virgin Atlantic: Steve Ridgway

Reuters reports that the EC continues to contend it was "forced" to act unilaterally when the ICAO was unable to come up with a multi-national solution. EU leaders say that it will modify its law if the ICAO creates a plan that that meets its goals. Work has reportedly increased on such a plan. Meanwhile, the environmental ministers of all 27 EU countries said at a meeting Friday that they were all fully supportive of the EU-ETS.

Some environmental groups are saying that threats from countries like China amount to no more than saber-rattling. They point to profits earned by Airbus, and say that the move to build more efficient and environmentally friendly aircraft should improve sales given the ETS.

But other critics say the issue is not airplane sales, but national sovereignty. European Climate Commissioner Connie Hedegaard said that the best solution to the dispute would be for the ICAO to come up with a solution that is "at least as good" as the one implemented by the EU.

FMI: http://ec.europa.eu/environment/index_en.htm