China Delays A330, A380 Purchases As Trade War Brews

A Virginia-based aviation analyst says that the EU will likely back down from its hard line stance on its recently-imposed Emissions Trading Scheme (ETS). In an article appearing in The Washington Times, Richard Aboulafia, vice president at the Teal Group, says if the EU is faced with the prospect of fighting a trade war with the rest of the world or backing down ... "I'm thinking they're going to back down."

In one of the fist salvos to be fired in that potential trade war, China has scrapped plans to buy 55 Airbus jets worth about $14 billion. Ten of those are A330s which China suspended on Thursday. It had previously announced it would put off buying another 35 A330s and 10 A380s, which caused Airbus CEO Tom Enders to send a letter to several EU leaders in protest.

Nearly 30 countries adopted a resolutions during a meeting in Moscow last month threatening retaliation against Europe should the ETS be fully implemented. The plan imposes a carbon tax on airlines that fly in European airspace for the entirety of the flight regardless of the flight's origin or destination.

So far, Europe has given no indication that it will back away from the ETS. In fact, the EU's U.S. delegation spokeswoman Silvia Kofler said that Europe will "stick to its legal provisions."

FMI: http://ec.europa.eu/clima/policies/ets/index_en.htm