10 Jun 2012

Carbon tax set to dominate airline talks

8:01 am on 10 June 2012

The world's airline bosses are meeting in Beijing with talks likely to be dominated by a bitterly opposed carbon tax, the European debt crisis and the high oil prices.

The International Air Transport Association (IATA) annual conference, starting on Sunday, is likely to see airlines joining global calls for an alternative to the European Union's Emissions Trading Scheme, an industry analyst said.

The European bloc has attempted to impose the controversial tax on all airlines, sparking a backlash from the United States, China, Russia and India as well as European carriers fearful of retaliatory sanctions.

Airlines flying to, from or within the European Union are required to monitor CO2 emissions for entire journeys and, if necessary, pay for exceeding their carbon dioxide allowances.

Orient Aviation magazine editor Barry Grindrod said all carriers were likely to to support the global approach.

The health of the European economy is also likely to come under scrutiny amid fears of the debt crisis currently gripping the continent, despite figures showing a 5.6% growth in European passenger traffic in April compared to the same month the previous year.

The high price of oil, meanwhile, continues to erode carriers' profits.

In 2010, the cumulative net profit of airlines reached $US15.8 billion, before plunging to $7.9 billion in 2011.