March 1, 2012

Hong Kong Airlines May Cancel A380 Over ETS

Hong Kong Airlines Ltd. has threatened to cancel an order for 10 Airbus A380s in the latest escalation of tension over the European Union’s decision to extend its emissions trading system (ETS) to aviation, the South China Morning Post reported. The Hong Kong-based carrier, which is backed by China’s fourth-largest carrier, Hainan Airlines Co. Ltd., said it is under pressure to cancel its order for 10 A380s with a list value of $3.8 billion, the Hong Kong newspaper said.

“We cannot do something which is against our country’s interests,” it quoted airline president Yang Jianhong as saying.A spokeswoman for Airbus said the Hong Kong Airlines orders “have been placed in the order book and they remain there”.Others officials declined to comment. “I cannot confirm this and I have no comment on this,” said Kenneth Thong, Hong Kong Airlines’ head of corporate governance and international affairs.

In Brussels, Isaac Valero-Ladron, EU spokesman for climate action, said the European Commission does not comment on “possible commercial decisions.” Plans to announce the high-profile A380 deal between Airbus and Hong Kong Airlines were called off at the Paris Airshow last June because of China’s anger over the ETS, industry sources said. But Hong Kong Airlines confirmed its A380 order some months later.

So far, China Southern Airlines is the only mainland Chinese airline to order the A380. Two of the five planes it ordered are already in service on the Beijing-Guangzhou route. In February, China banned its airlines from participating in the European Commission’s ETS unless they were given approval.
At a daily briefing on Thursday, Chinese Foreign Ministry spokesman Hong Lei repeated China’s opposition.

“The facts show that Europe’s actions are unpopular and will have no effect,” he said. “We hope that Europe can face squarely the international community’s concerns and devote themselves to solving the issue, not further complicating it.”

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