Hong Kong Air Reviews Order For A380s On EU Levies

Manila Bulletin
March 6, 2012
Jasmine Wang

Hong Kong Airlines Ltd. is reviewing its order for 10 Airbus SAS A380s, partly because of Chinese opposition to Europe's introduction of an emissions levy on aviation.

"It is possible that China's purchase of Airbus planes will be affected by the carbon-emission program," Yang Jianhong, the president of Hong Kong Air, said today. "Any company has to go along with its nation policy."

  The carrier, backed by China's HNA Group, also has business reasons for re-considering its A380 plans, Yang said, without elaboration. China, home to the world's fastest growing aviation market, and countries including the US, Russia and India have opposed the EU's emissions levies because of concerns it extends the bloc's regulations beyond its border.

  Hong Kong Air ordered the A380s as it tries to break Cathay Pacific Airways Ltd.'s grip on the city's businesstravel market.The airline expects to start recieving the double-decker planes in 2015, it said earlier this year. The recent discovery of cracks in wing parts of the superjumbos operate by Singapore Airlines Ltd. and Qantas Airways Ltd. isn't a factor in Hong Kong Air's review, Yang said.

  The carier has a total of 64 Airbus aircraft on order, including 15 A350-900s and 29 A320s, based on data listed on the planemaker's website.The Toulouse, France-baseed company decline to comment in an e-mailed reply to Bloomberg News questions. Chief Executive Officer Tom Enders told reporters last month that the EU levies may spark a trade war.

  Yang said it was too early to say whether the airline would have to compensate Airbus for a canceled order as no decision had been made. The South China Morning Post reported the order review earlier today.

  The EU added aviation to its emission-trading system this year as part of a wider push to pare pollution. Overseas governments have objected as carries are charged for instance on the first leg of a flight from Asia.

  China last month banned mainland carried from providing emissions data to the Eu. The EU hopes to resolve the issue through negotiations or it may ultimately be ruled on by the courts, Markus Ederer, its ambassador to China, said at the time. Hong Kong airlines are regulated by the city's authorities rather than the government in Beijing.