China Threatens Airbus

European plane maker Airbus has been threatened with retaliatory action by China should the European Union (EU) press ahead with plans to include international aviation in its carbon market, Reuters reported, citing three unidentified sources.

From 1 January 2012, all airlines flying to Europe will be required to be included in the Emissions Trading Scheme. China is opposed to the measure, saying it will cost Chinese airlines RMB 800 million in the first year and more than triple that by 2020, according to the report.

"We're taking this threat very seriously," a diplomat from one EU country involved in the dispute was quoted as saying. Another source said Chinese officials have told Airbus there will be “direct consequences”, while a third thought European airlines could be targeted by China before Airbus.

China is a major client for Airbus, and is slowly becoming an important part of the firm’s global value chain, so any dispute could have a major impact on the company.

Airbus was the first of the world's big two aircraft-makers to have a full production facility in the country, and in June 2009 delivered its first China-made plane. Airbus is also selling more business jets to China, the world’s second-largest market for commercial aircraft.

The plane builder had over 40 per cent share of the market in China in late 2009, Pierre Steffen, President of Airbus China Customer Services and Internal Operations, told BusinessForumChina in a January 2010 interview.

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