CX chief: EU’s ETS will lead to unfair distortions

HONG KONG – Cathay Pacific (CX) chief executive Tony Tyler warned that the competitive distortion resulting from the decision by the European Parliament to unilaterally and extra-territorially bring all flights into and out of Europe into the European Emissions Trading Scheme (ETS) would be “significant” for airlines in Asia.

“Once the system comes into effect, our CX non-stop flights to Europe – London, for example – will attract an emissions charge from the moment of pushback in Hong Kong to touchdown at Heathrow and vice versa. On the other hand, a Middle East carrier making the same journey on a two sector basis – stopping off at their Middle East home, where the passenger from Hong Kong would change planes and flight number – will be charged only for the final sector from the Middle East on to Europe,” Tyler said.

“The market has naturally created a difference in price for a non-stop and a one-stop journey to Europe. Yet the European proposal will add a much greater cost to the non-stop product, distorting the market to the detriment of the non-stop carrier,” he added.

Tyler also questioned the environmental impact of ETS. “How does it help the environment, when one carrier flies an efficient great circle route non-stop while the other flies a longer distance? Of course, it doesn't. If anything it just makes matters worse.”

Tyler said the right answer is to develop a global scheme that includes all flights and does away with any competitive distortion within the market. As well as being fairer, he said this would also be legal and more politically acceptable to airlines from outside the EU.