Beijing presses Hong Kong Airlines to boycott Airbus over EU carbon tax

2012 03 05

EUROPEAN carbon emission taxes on commercial aircraft - and pressure from Beijing - have prompted Hong Kong Airlines to re-consider its order for 10 European-made Airbus A380s.

The Civil Aviation Administration of China recently told mainland carriers not to comply with the emissions trading scheme, saying the tax breaches international law, and Hong Kong Airlines said it was under pressure to call off its planned purchases.

"We cannot do something which is against our country's interest," said Hong Kong Airline president Yang Jianhong. Hong Kong Airlines is 45 per cent owned by the mainland Hainan Airlines.

Recently, state-owned China Daily amplified the complaints against Hong Kong Airlines from an American and a Hong Kong environmental group, questioning its probity in shipping live dolphins from Japan to theme park interests in Vietnam. Hong Kong Airlines said the shipment was handled in compliance with all known official standards and regulations.

An Airbus spokesman said HK Airlines' purchase had been included in the aircraft maker's end-of-year order book, reported Hong Kong's South China Morning Post.

The EU tax is collected through an "emissions trading scheme" in which air carriers buy and sell carbon credits. It is opposed because most taxable emissions overwhelmingly occur beyond EU territory.

Tax proponents say such measures are justified security measures of one country's law requiring another to enforce it, such as the removal of shoes at European airports demand by the US. The European high court has backed the carbon tax after legal challenges from US airlines.

China has intimated that Airbus sales would become problematical. The US government has told airlines not to comply. India is also considering counter measures. Individual airlines have announced intentions of levying a surcharge.

Last week, 23 countries met in Moscow and declared they were ready to enter a trade war, said the SCMP, adding that they agreed to apply uniform retaliatory measures against European airlines Air France and British Airways.

Hong Kong Airlines has also announced plans to triple the size of its fleet to 60 by 2015. New routes to be launched this month include London, Taipei, Kaohsiung and Nanjing.

Source Shipping Gazette - Daily Shipping News

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