March 12, 2012 / 1:17 AM / 7 years ago

Aviation calls on EU leaders to fix carbon tax: FT

LONDON (Reuters) - Seven leading European aviation companies have written to European political leaders warning about the implications of a recently introduced EU carbon tax, the Financial Times reported on Monday.

A British Airways passenger jet takes off from Heathrow Airport in west London April 7, 2011. REUTERS/Stefan Wermuth

The signatories, which include Airbus EAD.PA, British Airways, owned by International Airlines Group (ICAG.L) and Virgin Atlantic VA.UL, argue that the pollution levy threatens jobs 2,000 jobs and trade.

They are concerned about trade-related retaliation by countries not complying with the Emissions Trading Scheme (ETS).

The industry executives also said they expect “suspensions, cancellations and punitive actions” by other countries to grow “as other important markets continue to oppose <the extension of> ETS”, according to the article, citing the letter.

According to Airbus and its airline partners in Europe, three unnamed state-owned Chinese airlines are refusing to finalize orders for 45 Airbus A330 long-haul jets worth up to $12 billion.

“<The ETS issue> started out as a discussion over environmental legislation but is turning into a trade conflict,” an Airbus spokesman, cited by the FT, is quoted as saying.

The opposition campaign is being led by Airbus and has the support of the chief executives of British Airways, Virgin Atlantic, Lufthansa (LHAG.DE), Air France (AIRF.PA), Air Berlin AB1.DE and Iberia.

The heads of Safran (SAF.PA) of France and MTU (MTXGn.DE) of Germany, two big makers of aerospace engines, also signed the letters.

They believe that the proposals should be put on hold until a global plan for carbon emissions is agreed.

Letters have been sent to leaders including British Prime Minister David Cameron, German Chancellor Angela Merkel and French Prime Minister Francois Fillon.

Reporting by Stephen Mangan; Editing by Ron Popeski

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