AIRLINES FACE being caught up in a global trade war as opposition grows to the European Union’s controversial plan to make carriers pay for their pollution, the aviation industry’s main representative body warned yesterday.
Tony Tyler, director general of the International Air Transport Association (Iata), said there was a risk countries outside the EU would take retaliatory action against the bloc’s plan to bring airlines within its carbon emissions trading scheme from January.
On Thursday, an advocate general to the European Court of Justice will issue an opinion on a request by US airlines for non-European carriers to be excluded from the EU scheme. This should give a guide to the subsequent ruling by the court, which the European Commission is confident will side with the EU rather than the US airlines.
Last Friday, 21 countries, including the US, Japan, Brazil, Russia, India and China, issued a declaration opposing how the EU scheme will apply to flights that start or end in one of the bloc’s 27 member states. They say the scheme is inconsistent with international law and should not apply to flights by non-EU carriers.
Mr Tyler said he feared retaliatory measures against European airlines by countries outside the EU if the US carriers lose their court case.
“That is the worst possible outcome for us – the airlines being caught in the middle of a trade war,” said Mr Tyler. “Other countries saying to Europe, ‘Okay, if you are hitting our airlines with additional cost, which you should not be doing, we will hit your airlines’. None of us wants that.”
He also noted that China, partly in protest at the EU scheme, threatened in June to derail a deal under which Hong Kong Airlines would order 10 superjumbo A380 aircraft from Airbus, a subsidiary of the European aerospace and defence group.
Mr Tyler said the EU should abandon its plan to bring airlines within its emissions trading scheme, adding the issue should be tackled through a global industry framework devised by the International Civil Aviation Organisation, a UN agency.
Iata estimates airlines face a bill of at least $26 billion (€19.7 billion) to comply with the EU scheme during the next decade. Under the scheme, airlines will have to surrender permits, each equal to one tonne of carbon dioxide, to cover their annual emissions. A portion of the permits will be allocated to airlines for free, but heavy polluters will have to buy additional ones. – (Copyright The Financial Times Limited 2011)