EU carbon tax insistence leads to Airbus boycott that benefits Boeing
2012 05 08
- Details
US COMPANIES, notably Boeing, are becoming the recipients of large orders from China because of an increasing Chinese reluctance to buy Europe's Airbus products because of the EU insistence on an aviation carbon tax, reports Forbes magazine.
"China is among 27 countries that have said they will consider retaliatory steps following the European Union's extension of its carbon market to aviation. The EU decided in 2008 that aviation should become part of its cap-and-trade carbon programme, said the report.
China Eastern Airlines recently announced that it is buying 20 Boeing 777 jets worth nearly US$6 billion, while selling five Airbus A340s to the US plane maker. China Eastern said it's selling the Airbus A340-600 aircraft worth $708 million to Boeing because they have high operating costs and "relatively weak route competitiveness."
The new Boeing jets will be delivered in stages from 2014 to 2018. The announcement represents a big win for Boeing, but a "huge loss of face for Airbus", said the Forbes report.
Boeing has announced that revenues rose 30 per cent in the first quarter and that it is raising production rates to meet increased demand.
In March, Airbus parent EADS chief executive Louis Gallois said Airbus is being subjected to "retaliation measures" by Beijing and warned that the European commercial plane maker will lose business if the EU fails to heed protests from airlines against the carbon tax.
"The Chinese government is putting on hold approval" for 35 wide-bodied Airbus aircraft ordered by Chinese airlines," Mr Gallois said. "We are worried that this conflict is becoming a commercial war and that there is a risk that Airbus will be taken hostage."
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