The suspension of the ETS tax on emissions helped to revive expected contracts between China PRC airlines and European aircraft manufacturer Airbus. Just two weeks after the announced suspension came an order from China Eastern for 60 new Airbus aircraft.
ZHUHAI/HONG KONG- Following the announcement of EU authorities to suspend for a year ETS (Emission Trading Scheme) charges on non-EU carriers, Europe’s Airbus expressed optimism it could rescue dozens of deliveries of wide-body passenger jets to China. The carbon emissions scheme was fiercely opposed by Beijing but also by Washington.
At the height of the row, Airbus (part of aerospace group EADS) had said China was blocking deals to buy passenger jets worth at least $12 billion, forcing the plane maker to put off part of a planned production increase that would have generated an extra 1,000 jobs.
“We hope we will go back to business as usual … and that we won’t have to worry about ETS when we do business here,” said Laurence Barron, president of Airbus China.
According to Airbus, contracts held up by the dispute include Chinese purchases of 35 long-haul A330 jetliners. Industry sources have said another 10 may be caught in the net. “I believe we will deliver those airplanes,” Barron told Reuters at a Chinese air show in late November, asked whether Airbus would be able to restore any frozen business. Airbus delivers indeed over 20% of its manufactured aircraft to China alone.
The dispute concerns a market-based scheme to make airlines account for their emissions by forcing them in many cases to buy allowances based on the length of the flight. Countries opposing the scheme say it would violate the sovereignty of their airspace and have warned of a trade war. The EU says action is urgently needed to help the bloc meet its climate obligations and has accused the international community of dragging its feet over the issue.
Announcing a one-year moratorium for flights into and out of EU airports, the European Union said it hoped to create a positive atmosphere for talks on an alternative global plan.
A day later, came then the spectacular order of China Eastern, one of China’s top three carriers. China Eastern Airlines agreed to buy 60 Airbus A320 aircraft for about $5.4 billion, expected to be delivered in stages from 2014 to 2017.
The new aircraft will help the airline satisfy rising demand for domestic medium- and short-haul passenger routes, China Eastern said on Friday. The deal is subject to approval by the airline’s shareholders and mainland regulators.
China Eastern said it had also entered a disposal agreement with Airbus for eight of its Canadair Regional Jets and 10 Embraer Regional Jets that have a combined book value of 1.5 billion yuan ($240 million).
These 18 aircraft are expected to be delivered to Airbus in stages from 2014 to 2016. China Eastern said it received these aircrafts between 2000 and 2007, which now have an average usage of about 8.2 years.
To help meet fast-growing demand in Asia, Airbus is in the midst of plans to increase production of the A330, its best-selling wide-body jet, to 10 aircraft a month from next year.
(Sources: Reuters various reports)
Luc Citrinot a French national is a freelance journalist and consultant in tourism and air transport with over 20 years experience. Based in Paris and Bangkok, he works for various travel and air transport trade publications in Europe and Asia.
