US airlines are scrambling to digest a new 10% tariff on European-made Airbus planes that threaten additional havoc in a market already reeling from frozen deliveries of Boeing's 737 MAX. Late Thursday, Delta called the proposed levy on aircraft from Europe that are already under contract for purchase "an unfair tax on US consumers and companies." The tariff on Airbus planes creates uncertainty for aircraft delivery terms much like the global grounding of Boeing's 737 MAX in March after two fatal crashes and comes at a time of threats to international air travel demand in the midst of slowing global economic growth and trade disputes. Delta is not a 737 MAX customer but with some 266 Airbus orders is the most exposed to aircraft levies due to take effect on Oct. 18 after the World Trade Organization gave Washington the right to impose tariffs on $7.5b worth of EU goods annually in a long-running case. Although the overall value of trade hit by sanctions was in line with expectations reported by Reuters, percentage tariffs were less than expected with Airbus planes initially subject to a tenth of the 100% rival Boeing had recommended. Market sources said this was enough to disrupt trade in the cut-throat plane business but low enough to tempt some airlines to negotiate for Airbus to absorb some of the cost, squeezing its margins. "10% is a deal breaker for airlines," an industry source said, noting that planes liable to the tariff may have to be delayed. Planemakers are typically reluctant to absorb such costs, the source added. On a positive note aircraft parts were spared from tariffs, which means independent repair shops, some feeling pain from the grounding of the Boeing 737 MAX, will continue to function. That will benefit Boeing and Airbus fleets equally, industry sources said.<br/>
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A UN agency agreed Friday to prioritise studying options for a long-term goal to reduce aviation emissions aimed at combating climate change, but made no firm commitments and faced pushback from China and India. The ICAO, which ended its 11-day assembly on Friday, said it would weigh long-term options for reducing emissions from international flights that would be presented at its next assembly in 2022. Transport and Environment, a non-government organization that bills itself as Europe’s leading clean transport advocacy group, said in a statement that the assembly “failed to take any significant steps to rein in the sector’s emissions.” But the Air Transport Action Group, which represents airlines and other industry, said it was “encouraged that there was clear support from governments meeting at ICAO to develop a UN-backed goal.” ICAO, which holds an assembly every three years, had set a major climate initiative at its last full gathering in 2016, and aviation leaders were under pressure to do more after overall carbon emissions hit record highs last year. This year’s gathering, which began on Sept. 24, took place under the shadow of climate protests led by teenaged Swedish activist Greta Thunberg, who drew hundreds of thousands to the streets in Montreal on Sept 27. ICAO’s 193 member countries overwhelmingly backed the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), a medium-term plan to help airlines avoid adding to their net emissions from 2020. Under CORSIA, which is due take effect in 2021 on a voluntary basis, airlines would purchase carbon credits from designated environmental projects around the world if their emissions exceed agreed targets. But representatives from China and India, along with Russia, argued that the CORSIA plan and the agency’s separate efforts to come up with a long-term target would create an unfair burden on emerging and developing countries. <br/>
Travellers are willing to pay more for flights if they believe the extra money will be used to tackle carbon emissions, researchers said on Friday. Passengers were more likely to book flights that carried an extra fee if it was labeled as carbon offset than if it was called a carbon tax, researchers at the University of British Columbia found. Offsetting aims to mitigate the climate damage carbon emissions cause by paying to prevent or reduce emissions elsewhere. “Taxes feel like you’re charging people money for nothing,” said David Hardisty, an assistant professor of marketing and behavioral science at UBC Sauder School of Business. “Whereas an offset is the idea that, ‘Sure we’re paying, but we kind of have an idea where that payment is going, to make the environment better,’ which is what people want.” The findings were published this week in the Journal of Environmental Psychology and suggest a possible way for the global airline industry, under pressure over carbon emissions, to improve its record. The study consisted of two separate online surveys of more than 1,800 participants in the United States. The aim was to gauge consumers’ reaction to a $14 carbon fee that was presented to them in several different ways at the time of a hypothetical ticket purchase.<br/>