IATA Reiterates Call for Emissions Solution
06/11/2012| 10:25pm US/Eastern
BEIJING--The trade group representing the world's airlines reiterated its call for a comprehensive global solution on the contribution of aviation emissions to climate change, criticizing the European Union's unilateral move on reducing airlines' pollution emissions as creating discord at a time when the industry is still struggling with a deepening global economic crisis.
The call comes at a particularly tough time for the airline industry, which is expected to post a net profit of $3 billion this year, less than half the $7.9 billion the industry made in 2011, according to the International Air Transport Association.
Airline executives are gathering in Beijing for a three-day conference to discuss issues such as high oil prices, intensifying competition, and increased taxation on the airline industry.
"Europe's unilateral and extra-territorial inclusion of international aviation in its emissions trading scheme from 2012 is creating discord when we need harmony," said IATA Director General Tony Tyler.
"I think it's a good thing that China's response has been strong to the ETS, mandating its carriers not to be a part. We hope Europe realizes that it's taking a wrong approach and it finds a way to reverse its position."
The European Union's move to require all airlines to participate in the E.U.'s Emissions Trading Scheme has prompted outcries and threats of a trade war. It said in May that a total of 10 airlines from China and India failed to meet a March 31 deadline to report their 2011 carbon dioxide emission data, raising the possibility of penalties or a ban from flying to Europe if they miss the next deadline in mid-June.
China Eastern Airlines Corp. (0670.HK) Chairman Liu Shaoyong said on the sidelines of the meeting that the Shanghai-based carrier would continue to comply with the Chinese government's decision of not submitting its carbon dioxide emissions data to the E.U.
He reiterated that the carrier supports a multilateral approach of reducing global carbon emissions through the International Civil Aviation Organization, a Montreal-based agency of the United Nations, at its 2013 Assembly.
China has banned its airlines from complying with the E.U. program, and has suspended some orders made by its airlines with European aircraft manufacturer Airbus, including 10 Airbus 380s.
"It's very unfortunate to end up being the scapegoat on ETS because we are European and everybody knows who Airbus is," said John Leahy, Airbus's chief operating officer for customers, in an interview with Dow Jones Newswires.
Rival Boeing Co. (>> The Boeing Company), despite taking advantage of the trade row by taking orders from Airbus, echoed the industry's view that the new program would increase the burden on airlines and "make them less profitable and less likely to buy an environmentally friendly airplane."
"Everybody looks at ETS as a potential windfall for us. But I think ETS is a bad thing for the entire market. It's bad for our customers, it's not going to do anything to reduce the environmental footprint of airplanes," said Mr. Albaugh.
Write to Joanne Chiu at Joanne.firstname.lastname@example.org and Jeffrey Ng at Jeffrey.Ng@dowjones.com