Letter from Airbus to Chinese aviation official shows how active Airbus was in getting ETS emasculated
In April a deal was agreed between Airbus and China that they would buy 18 long-haul A330s because of the ETS being temporarily stopped. Now Reuters reports on a letter from the Airbus Chief Executive, Fabrice Bregier to China’s top aviation official shortly after the EU back-pedaled on its ETS in November, (4 days after the ETS climb down) saying AIrbus had been “very active” in supporting China’s preference for a broader global system. The letter gives a glimpse into the intensity of the lobbying in the dispute, which helped persuade the EU to freeze the ETS. Behind the scenes, Airbus claimed partial credit for the EU climb-down and cheered what its chief executive described to Beijing as “joint efforts” to limit damage to Chinese airlines. Bregier said “Through our joint efforts, we have managed to ensure that Chinese airlines are not unfairly impacted by the scheme as previously planned.” Airbus needs certainty on its future plane sales far in advance, in order to order parts. Reuters says more valuable deals for Airbus from the Chinese remain on hold as China awaits the outcome of international talks on aviation carbon emissions.
Airbus to China: We support you, please buy our jets
By Barbara Lewis ( Reuters )
May 12, 2013
(Brussels – Reuters) – China’s decision to ease a boycott of some $11 billion in Airbus jet orders followed a high-level appeal from the planemaker urging Beijing to recognize its support over a trade row with Europe, a letter seen by Reuters shows.
It gives a glimpse into the intensity of the lobbying in the dispute, which helped persuade the European Union to freeze a law on regulating international aviation emissions.
China partly lifted a blockade on 45 long-haul A330 jet orders during a visit by French President Francois Hollande last month.
Behind the scenes, Airbus claimed partial credit for the EU climb-down and cheered what its chief executive described to Beijing as “joint efforts” to limit damage to Chinese airlines.
Writing to China’s top aviation official shortly after the EU back-pedaled on its Emissions Trading Scheme last November, Fabrice Bregier said Airbus had been “very active” in supporting China’s preference for a broader global system.
“Through our joint efforts, we have managed to ensure that Chinese airlines are not unfairly impacted by the scheme as previously planned,” Chief Executive Fabrice Bregier said.
“I hope we at Airbus have been able to clearly demonstrate our strong support to Chinese aviation.”
Airbus, which also got backing from European leaders, says the blocked orders alone put 2,000 jobs at risk.
“Since I became president of Airbus in June (2012), I have made this issue one of the top priorities for the company,” Bregier wrote to Li Jiaxiang, the government official in charge of the Civil Aviation Administration of China (CAAC).
A spokesman for Airbus declined to comment on the letter but reiterated that the company, a subsidiary of EADS, welcomed the EU’s decision to pause the scheme for a year.
Bregier signed the two-page letter on November 16, four days after EU Climate Commissioner Connie Hedegaard agreed to “stop the clock” for a year on plans to make all airlines using EU airports pay for their emissions through a trading scheme.
The proposal unleashed a volley of international criticism and China – which viewed it as a breach of sovereignty – froze orders for aircraft worth up to $230 million each.
Bregier urged China to respond to the European Union’s decision by swiftly granting approvals for all 45 aircraft.
While Beijing approved 18 orders worth $4 billion, more valuable deals remain on hold as China awaits the outcome of international talks on the problem of managing borderless emissions without infringing sovereignty.
PRESSURE TO ORDER PARTS
Bregier’s letter sheds light on frantic efforts to unblock the orders as Airbus reached the deadline for ordering parts for the jets. According to his letter, the first aircraft was tentatively scheduled to be delivered in the summer of 2013.
Industry sources say a golden rule of the aerospace industry is that planes are never built without a firm order and deposit.
However, the schedule suggests Airbus may have been willing to show some flexibility, given China’s role as the world’s fastest-growing aviation market and a strategic trade partner.
Longest-lead-time components are ordered around a year in advance, meaning that if the planes are indeed to be delivered this summer, some parts would have been ordered last year.
The letter also gives the first available breakdown of the A330 orders, details of which have mostly been kept secret pending final approval from the Chinese government.
They include 10 aircraft for Air China, 10 for Hainan Airlines, 10 for China Southern and 15 for China Eastern. The letter said first deliveries were tentatively scheduled for mid-2013.
Airbus has not said which of these are included in the approvals for 18 aircraft announced on April 25.
It is not the first time high-profile plane orders have become swept up in trade tensions between China and Europe or the United States, home to Airbus’s arch-rival Boeing.
Supported by India and the United States, China objected to the EU airlines plan on the grounds that it based charges on the whole trip, including China’s jealously protected airspace.
The European Union says it was forced to act after more than a decade of inaction by the international community.
For internal EU flights the EU scheme remains in place and the European Union says it will re-impose the scheme for all flights using EU airports if global talks do not progress.
In practice, diplomats say that places the onus on the United Nations’ International Civil Aviation Organization to reach a breakthrough during its general assembly from September 24.
The absence of a deal would raise the prospect of further deadlock over Airbus orders.
Aviation executives are expected to tackle the issue on Monday in Montreal, home to ICAO, where they are attending an Airbus-sponsored environment workshop.
(Additional reporting by Tim Hepher; Editing by Louise Heavens)
China agrees $4.1bn Airbus plane deal to buy 18 wide-body jets + $3.8 bn deal for 42 narrow-body jets
April 27, 2013 Fear by European countries, Airbus and many airlines, that loss of sales of Airbus planes to China was a reason for “stopping the clock” for a year, on aviation’s inclusion in the ETS. Now a deal has been agreed that China will buy 18 A330s from Airbus. Now inclusion of aviation in the ETS has been emasculated, Airbus is keen to sell as many planes as it can to China and returning to what it calls ‘business as usual’. The order that has now been announced is part of an earlier order for 45 wide-body jets, which are worth about $4n at list prices, although China may get a hefty discount on them. There is also an order by the Chinese for 42 A320 narrow-body jets, worth about $3.8bn though this deal had not been affected by the ETS debacle. Airbus, which is a subsidiary of EADS, hopes China will be its largest customer during coming 2 decades, buying large numbers of planes. France, Germany and Britain continue to do all they can to build strong commercial ties with China, to boost exports and income. Click here to view full story…
EU states deny reports that their Airbus ministers seek suspension of EU ETS until ICAO agreement
GreenAir online 13.9.2012 http://www.greenaironline.com/news.php?viewStory=1589 which includes this: A spokesman at the UK’s Department for Business said it was incorrect that his minister was calling for a suspension of aviation from the EU ETS. “The UK is committed to reducing aviation emissions and to the role of the EU ETS in doing so,” he told GreenAir. “Like other European nations, the UK is keen to address issues that have been raised by a number of nations around the operation of the aviation element of the EU ETS. There was agreement by the European ministers at the Berlin Air Show that these issues need to be addressed through a global agreement to tackle aviation emissions. We recognise that a failure to resolve these issues could have a serious impact on the UK and European aerospace manufacturing and aviation sectors. We are pressing for faster progress in the International Civil Aviation Organization (ICAO) and other fora to secure a global solution which delivers on the EU’s objectives of continuing to reduce emissions from aviation.”
Airbus tries to get inclusion of aviation in ETS suspended. EU confirms no change.
September 13, 2012 There have been press stories suggesting that European officials backing Airbus are recommending the suspension of ETS in order to avert a trade war with major economic powers such as China and the USA. China and India do not allow their airlines to participate in the ETS because the charge is for the whole flight distance, not just the section over Europe. Beijing has blocked purchases of European aircraft (Airbus) by its carriers, so Airbus is unhappy about losing its fastest-growing market and is putting strong pressure on the EU as they may lose plane sales. Those backing Airbus want a “solution” before April 2013, but the matter is not due to be dealt with by ICAO till September 2013. Connie Hedegaard has confirmed that there are “no changes in EU and member states approach on the ETS and aviation” and this is just pressure from Airbus. The EU has repeatedly said it won’t give up its pollution curbs on airlines. Click here to view full story…
More news about the ETS at