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EADS says EU carbon tax blocking Airbus orders from China
by Staff Writers
Paris (AFP) March 8, 2012

China has blocked purchases of Airbus planes by Chinese companies in reaction to a disputed European carbon tax, the head of the Airbus parent company EADS said while announcing strong annual earnings.

EADS chief executive Louis Gallois told a press conference as he presented results for 2011 that Airbus was "subjected to retaliation measures" by a Chinese government that refuses to approve orders by airlines for long-haul jets.

The company also said it provisioned 105 million euros ($198 million) on its 2011 books to cover the cost of repairing tiny cracks on the wings all of the 67 A380s, Airbus's state-of-the-art jumbo plane, already in operation.

They appeared on "16 or 17" planes last year, Gallois said, and the European Aviation Safety Agency ordered immediate inspections on all A380s.

Regardless of the setback, Gallois said production of the superjumbo would continue and break even by 2014/15.

The carbon tax imposed on airlines by the European Union came into effect on January 1, but carriers will begin receiving bills only in 2013 after this year's carbon emissions have been assessed.

The EU has says the tax will help it achieve a goal of cutting carbon emissions by 20 percent by 2020 and that it will not back down on the plan.

But more than two dozen countries, including China, Russia and the United States, have opposed the EU move, saying it violates international law.

Gallois said that at EADS, "we are pushing for a worldwide solution, we don't think that a European solution only is appropriate.

"It is creating a distortion and a climate of opposition between Europe and the rest of the world," he noted.

Regarding orders for Airbus planes from China, Gallois said that opposition by Beijing could affect the sales of at least two dozen long-haul A330 planes this year and next.

"We ask the European Union to take into account the global position of almost every country outside of Europe against this scheme," he said.

EADS said that its 2011 net profit jumped 87 percent to 1.03 billion euros, sending the group soaring to the top of the CAC 40 gainers in Paris trading on Thursday.

The group also issued an ambitious outlook for this year, while Gallois warned Germany that EADS would continue to be managed "without external interference."

He was responding to a letter written last month by the German government's coordinator for aerospace activites urging EADS to readjust industrial and executive activities that have a growing focus in France.

"This letter is not appropriate," Gallois told the Paris press conference.

"This letter is not in accordance with governance of listed companies," the EADS chief executive stressed, adding: "We have to take our decisions without external interference."

Unlike France, Germany does not currently own a direct stake in EADS (European Aeronautic Defence and Space Company).

The aerospace group, which also has extensive activities in the defence sector, said that sales gained 7.0 percent to 49.1 billion euros and that its operating profit reached 1.8 billion euros, a gain of 34 percent.

The group expected to raise that figure to 2.5 billion euros this year, which would represent a further increase of 40 percent, and forecast a 6.0 percent increase in sales.

New orders were 58 percent higher in 2011 meanwhile, at 131 billion euros, and raised total EADS orders to 540 billion euros, the equivalent of more than seven years of activity.

Shares in the group shot up by 8.88 percent to 29.23 euros in midday exchanges on the Paris stock exchange, while the CAC 40 index was 2.18 percent higher overall.

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Air France-KLM switches into loss on fuel costs
Paris (AFP) March 8, 2012
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