Indian airlines’ EU plans may hit air pocket

Indian carriers’ entry into the European Union (EU) carbon market next year is set to slow expansion plans as operational costs rise, leading to higher airfares that will make some airlines less competitive than their rivals.
From January 2012, emissions from all flights that arrive at or depart from an EU airport will be covered by the EU emission trading system (ETS).
The scheme, aimed at reducing industrial greenhouse gas emissions cost-effectively, will cover all airlines operating in the EU except for very light aircraft and flights involving the military, police, customs, rescue operations and government business.
While the US and China have already protested against the scheme, the Indian government is yet to take a stance on it.
Air India Ltd, Jet Airways (India) Ltd and Kingfisher Airlines Ltd have flights operating in Europe and plan to increase flights to the continent.
Aviation accounts for less than 3% of 2009 global carbon emissions, but is expected to increase to 5% by 2050.
Under the proposed scheme, the EU can impound and sell any aircraft in the event of non-compliance and cancel an airline’s certificate to fly, technically known as air operator’s certificate.
The EU ETS will add to costs in terms of monitoring, reporting and verifying carbon emission records. Airlines will also have to spend to allocate and trade carbon credits in the open market.
A senior Air India executive said the airline has already started submitting verified data on carbon dioxide emissions to EU ETS. “We were asked to submit this data under protest. This is a one-sided regulation. We have asked the ministry to frame similar regulations for carriers that are flying to India,” the executive said.
29/03/11 P.R. Sanjai/Live Mint

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Categories: Foreign Mar 2011, Indian Aviation- In General Mar 2011