Annex 1: News

AIR TRANSPORT: QUARTERLY REPORT NO.13 4th QUARTER 2006 (October to December)

A EU/REGULATORY ...... 2 Commission invokes safeguard clause against Bulgaria on aviation safety ...... 2 Commission takes Greece to the Court of Justice ...... 2 Airport tax: Commission delivers a reasoned opinion to Malta...... 2 EU and Morocco seal their agreement on GALILEO...... 2 EU-Morocco aviation agreement ...... 2 New ways to benefit from Galileo navigation system...... 2 Commission harmonises air navigation service charges ...... 2 EU and Russia agree on Siberian overflight payments...... 3 The EU and India strengthen cooperation in civil aviation...... 3 Commission allows Malta to aid new air routes ...... 3 Investigation into support to DHL and Leipzig airport...... 3 Aid measures for Air Caraïbes regional services...... 3 Greece: illegal subsidies to Olympic...... 3 Airlines black list: Commission adopts new measures...... 3 Reasoned opinion to Luxembourg on aviation security ...... 4 Aviation security: threats from liquid explosives ...... 4 B SCHEDULED AIRLINES: EU/OTHER REGIONS...... 4 LCC routes announced for next quarter...... 4 EasyJet launches early boarding initiative to boost revenue...... 4 Middle and higher income earners benefit from no-frills carriers ...... 5 's launches services...... 5 FL, Fons and Sund group majority airline interests in new leisure unit ...... 5 MyTravel returns to profit despite continuing UK losses ...... 5 New French operation formally approved...... 5 Weak demand in Western Europe hits TUI's third quarter ...... 5 Repayments row behind abrupt Ajet grounding...... 6 Irish carrier Eirjet suspends operations...... 6 to sell BA Connect to ...... 6 Blue1 to add another six destinations next year: CEO ...... 6 ERA members call for better regulatory process ...... 6 ERA members call for unity against terrorism...... 6 Major aircraft order ...... 7 Iberia is committed to BA partnership...... 7 Iberia web sales up sharply in 2006...... 7 C CARGO AND INTEGRATORS ...... 7 Cargologic to take over Swiss WorldCargo handling at Lugano ...... 7 DHL and Atlas finalise terms of Polar partnership ...... 7 West adds another five ATP freighters...... 7 New Belgium-China ASA good for TNT ...... 8 FedEx seeks 10% of world’s 757-200s in 10 years...... 8 D AIRPORTS ...... 8 AdP to manage Oman airports ...... 8 Leeds-Bradford airport to be sold ...... 8 Bids for Exeter airport...... 8 New runway at Frankfurt...... 8 New passenger terminal for Dublin...... 8 E AIR TRAFFIC MANAGEMENT...... 9 ATM safety improving in most areas, says study...... 9 Eurocontrol future defined...... 9 Single Sky delays...... 9 Iberia flags key industry concern...... 9 F SAFETY AND SECURITY ...... 9 Boeing patents anti-terrorism auto-land system for hijacked airliners ...... 9 UK research questions benefit of in-cockpit cameras...... 10 Missile protection equipment...... 10 G ENVIRONMENT ...... 10 EC formally publishes emissions-trading proposals...... 10 IATA urges EC to wait for ICAO standards on emissions ...... 10 USA ready to fight over emissions trading plan...... 10 UK business leaders fight against aviation growth curbs...... 11 UK report urges global solution to aviation emissions...... 11 Pressure mounts on airline industry to tackle climate change ...... 11 H AIRCRAFT MANUFACTURERS ...... 11 Bombardier FY3Q net income improves to $74m ...... 11 Production woes cut into Q3 earnings at Embraer...... 11 Airbus woes push EADS to Q3 loss ...... 11

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 1 A EU/regulatory

Commission invokes safeguard clause against Bulgaria on aviation safety IP/06/1860 The Commission decided on 20 December to partially exclude Bulgaria from the benefit of the internal aviation market. The Commission considers that there is a considerable risk that Bulgaria will not be able to ensure full compliance with the Community rules on aviation safety and on the internal aviation market. A safeguard clause based on the Act of Accession is invoked, in order to ensure the proper functioning of the EU air transport market and to guarantee the highest of safety to EU citizens.

Commission takes Greece to the Court of Justice IP/06/1779 The Commission decided on 12 December to refer Greece to the European Court of Justice for failure to respect EU legislation on the establishment of a national supervisory authority in the context of the single European sky.

Airport tax: Commission delivers a reasoned opinion to Malta IP/06/1776 The Commission sent on 12 December a reasoned opinion to Malta for the airport tax levied at Malta International Airport. The airport tax differentiates between passengers in a discriminatory way.

EU and Morocco seal their agreement on GALILEO IP/06/1774 On 12 December the EU and Morocco signed an agreement for co-operation on the European satellite radio navigation programme GALILEO. The agreement covers cooperation, including joint activities in the field of scientific research and training, industrial cooperation, trade and market development, standards, certification and regulatory measures.

EU-Morocco aviation agreement IP/06/1770 The EU and Morocco have signed on 12 December a new type of aviation agreement between the EU and Morocco. This replaces all the bilateral aviation agreements between the Member States and Morocco. It is original in that it not only opens up markets but is also designed to approximate the legislation of the two parties.

New ways to benefit from Galileo navigation system IP/06/1709 The Commission adopted on 8 December a Green Paper on Satellite Navigation Applications. This document will give all interested stakeholders an opportunity to provide their opinion on the development of satellite navigation applications, and in particular on the role the public sector could play in creating an appropriate framework and defining concrete targets for such applications.

Commission harmonises air navigation service charges IP/06/1693 The Commission adopted on 6 December 2006 a Regulation on a common charging scheme for air navigation services. The new system regulates which costs are eligible and how users will be charged for navigation services. The regulation will apply as of 1 January 2007.

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 2 EU and Russia agree on Siberian overflight payments IP/06/1626 Six months after having obtained the mandate from EU Member States, the Commission succeeded in negotiating an agreement with the Russian Federation on the longstanding issue of Siberian overflight payments. It finally solves a 20 years conflict costing around € 300 million to EU airlines in 2006..

The EU and India strengthen cooperation in civil aviation IP/06/1619 A. "Joint Declaration" was signed at the EU-India Aviation Summit held in New Delhi on 22 November 2006 that will lay the foundation for closer cooperation between the EU and India in a range of areas of civil aviation.

Commission allows Malta to aid new air routes IP/06/1606 The Commission decided on 22 November to allow Malta to grant start-up aid for new air routes from Malta. The measure will last until September 2011 and provides for a total of MTL25 million to airlines to finance new routes. The primary objective of the aid is to improve connectivity by enhancing access to air transport services which are of basic importance for the economic and social development of Malta.

Investigation into support to DHL and Leipzig airport IP/06/1603 The Commission opened an in-depth investigation under the EC Treaty's state aid rules into possible aid granted by the German Land of Saxony to DHL and Leipzig/Halle airport, through the financing of the new southern runway and financial guarantees endorsed by Saxony. The Commission has doubts that the two operations have been carried out on terms that would be acceptable to a market investor

Aid measures for Air Caraïbes regional services IP/06/1461 On the 24th of October the Commission authorised two state aid measures for the airline Air Caraïbes with a view to promoting the development of regional air transport to the Antilles and between the Antilles and French Guiana. One of the aid measures will serve to charter a 100- seater Embraer 190 for use between Guadeloupe, Martinique and French Guiana. The other will enable a 70-seater ATR 72-500 to be chartered for use between Guadeloupe, Martinique and Saint-Martin.

Greece: illegal subsidies to Olympic IP/06/1424 The Commission adopted on the 18th of October a decision requesting the European Court of Justice to impose a lump sum penalty and a periodic penalty on Greece for its failure to implement its 2002 decision in relation to the recovery of a State aid estimated at least €160 million granted by Greece to Olympic Airways between 1998 and 2002.

Airlines black list: Commission adopts new measures IP/06/1384 The Commission adopted on the 12th of October the second quarterly update of the Community list of airlines banned in the European Union, which was drawn up in March 2006 and already amended last June. The new list replaces the previous one and is now available on the Commission’s website. The Commission has therefore fulfilled its obligation to update the black list on a regular basis.

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 3 Reasoned opinion to Luxembourg on aviation security IP/06/1382 The Commission sent on the 12th of October a reasoned opinion to Luxembourg for failure to respect European legislation on aviation security. The aim of this legislation is to ensure common basic standards on aviation security measures at Community airports in order to prevent acts of unlawful interference against civil aviation.

Aviation security: threats from liquid explosives IP/06/1313 The Commission adopted a regulation on the 5th of October restricting the liquids that passengers can carry past screening points and then onto aircraft. This comes as a reaction to another threat to civil aviation security stemming from home made liquid explosives.

B Scheduled airlines: EU/other regions

B1 Low-cost carriers LCC routes announced for next quarter Air Berlin Nuremberg to Moscow Domodedovo thrice weekly. Air Baltic Riga to Dubai, weekly. Also Riga – Gothenburg thrice weekly. to (twice daily), Faro (four a week) and Murcia (thrice weekly). Barcelona (daily), Rome Fiumicino (daily), Lisbon, and Marseille (four times a week) Centralwings Lodz to Paris Beauvais (twice weekly, raising to thrice weekly in the summer) EasyJet Madrid to Marrakech and Casablanca, Lyon, Toulouse, Rome Ciampino and to Oviedo and La Coruna. to Munich and Madrid, Palma, and Milan. Newcastle to Krakow and Mahon. to Bordeaux. Flybe Cardiff to Belfast City Airport (12 times per week). Flyglobespan to Paphos, Alicante, Barcelona, Faro (all weekly),Murcia (twice weekly), while Palma de Mallorca will be served thrice-weekly. Durham Tees Valley in the UK to Alicante, Faro, Malaga and Palma. FlyMe Gothenburg to Bologna, and Athens. Malmo to Alicante, Bologna, and Nice. Stockholm to Nice and Alicante, Rome and Lulea. Germanwings Cologne/Bonn to Bucharest, Alghero, Sofia, Burgas and Varna, Kavala (Macedonia), Sarajevo (Bosnia), Zadar (Croatia). Hamburg to Palma Mallorca. Stuttgart to Corsica. Berlin Schonefeld to Burgas, Varna, and Balaton (Hungary). Jet2 Newcastle to London Gatwick (replacing British Airways which withdrew from the route) to Prague. adds 10 routes from Nottingham Airport to Granada, Santiago de Compostela, Valencia, Bergamo, Pisa, Alghero, Bratislava, Krakow, Inverness and Knock. Dublin to Stockholm and Warsaw. The airline also is to open 14 routes from Madrid Barajas Airport: to Billund, Oslo, Gothenburg, Malmo, Eindhoven, Faro, Oporto, Marseille, Paris, Brussels, Bournemouth, Shannon, Dublin and Nottingham East Midlands. Shannon to Lodz. Katowice to Coventry, Bournemouth, Eindhoven, Bourgas and Crete. Gdansk to Doncaster-Sheffield and Malmo. Warsaw to Oslo Torp, Durham Tees Valley, Bourgas in Bulgaria, and Corfu.

EasyJet launches early boarding initiative to boost revenue 28Nov06, Air Transport Intelligence news EasyJet today launched an initiative to enable passengers to pay an extra fee for early boarding. Under the initiative, the first 20 passengers to make an online booking will be given the option of paying between ₤2.50 and ₤7.50 to board the aircraft ahead of other passengers.

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 4 Middle and higher income earners benefit from no-frills carriers 16 Nov06, TravelMole No-frills airlines appear to have had little impact on overall rates of traffic growth, a report by the CAA shows. The report suggests that there is little evidence of any marked change to the income and socio-economic profile of air passengers. The report concludes that the average annual rate of growth of short-haul traffic is similar to that before the arrival of no-frills airlines. Most of the no-frills airlines' growth seems to have been at the expense of other carriers. Although the number of leisure passengers from all income groups has increased, the majority of this increase has come from those in middle and higher income and socio- economic groups. There has been a more significant impact on business passengers. The availability of lower fares to and from more destinations (and in particular the removal of fare restrictions) has made trips on a range of airlines more viable for lower income business passengers, particularly from the UK regions.

Iberia's Clickair launches services 02Oct06, Air Transport Intelligence news Spanish low-cost carrier Clickair launched services yesterday using a fleet of three Airbus A320s formerly operated by part-owner Iberia. The carrier plans to operate a fleet of 30 A320s by the end of 2008. The airline is 20% owned by Iberia, parent Nefinsa also owns a 20% share in Clickair. Spanish construction company Cobra, tour company Grupo Iberostar and industrial group Grupo Quercus also own equal 20% stakes. B2 Charter carriers/leisure groups FL, Fons and Sund group majority airline interests in new leisure unit ATI, 27Dec06 Icelandic investment firms FL Group, Fons and Sund have formed a new leisure company, which will include full stakes in budget carriers Sterling Airlines and Iceland Express and its 51% stake in UK charter airline Astraeus. Iceland Express parent Fons has taken a 44% stake in Northern Travel Holding, while Sterling owner FL Group has taken a 34% stake. Sund holds the remaining 22% stake.

MyTravel returns to profit despite continuing UK losses ATI, 14Dec06 UK tour operator MyTravel Group has turned in a full-year pre-tax profit of £43.8m, after turning around losses of more than £17m last year. Operational profit rose by 20% to £61.7m. UK operations are still loss making, but the loss was more than halved to just under £13 million. UK revenue was down by 10.6%. Northern European sales were largely static, while North American revenue was up by more than 17%.

New French Transavia operation formally approved ATI, 27Nov06 Air France-KLM’s plan to establish a new medium-haul leisure carrier for the French market through its subsidiary company Transavia has been formally approved. The carrier will use the same model deployed by Transavia in the Dutch market, combining charter and budget airline services on a string of new leisure destinations, to establish a new carrier predominantly operating out of Paris Orly. Management of the new carrier will be separate from that of Air France.

Weak demand in Western Europe hits TUI's third quarter ATI, 09Nov06 TUI Group’s tourism earnings stayed static during the third quarter as underperformance in the company’s Western European operations dampened improvements in its other two geographic business areas. The company’s earnings in Western Europe were down by

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 5 nearly one-fifth. TUI points out that restrained demand in France hit tour operator Nouvelles Frontieres and French carrier Corsair.

Repayments row behind abrupt Ajet grounding ATI, 02Nov06 Cypriot charter carrier Ajet Aviation has ceased flights after major creditors sought the immediate repayment of debts, rather than allowing the company more time to make its repayments. Ajet only took over the operations of Helios Airways in April, after the carrier faced a torrid time in the aftermath of the high profile crash of a Boeing 737-300 in Greece last year that killed all 121 passengers and crew on board.

Irish carrier Eirjet suspends operations ATI, 19Oct06 Shannon-based charter and wet lease operator Eirjet has suspended operations, after notifying Irish aviation regulators it is unable to meet its current obligations to its tour operator clients. The Irish carrier launched flights in late 2004, operating Airbus A320 aircraft on flights on behalf of tour operators.

B3 Regional airlines British Airways to sell BA Connect to Flybe 03Nov06, ATI British Airways (BA) has reached agreement in principle to sell the regional operation of its subsidiary carrier BA Connect to UK budget carrier Flybe. As part of the deal BA will take a 15% stake in the Exeter-based regional. The deal will not cover BA Connect services from and between Manchester and New York. Neither does it cover the regional ground-handling business, British Airways Regional.

Blue1 to add another six destinations next year: CEO 01Nov06, ATI SAS Group’s Finnish division Blue1 is expecting to open another six non-stop routes next year to continue its network expansion to continental European destinations. The airline believes it has enough capacity in its all-jet fleet (comprising three Boeing MD-90s and nine BAE Systems Avro RJs) to cope with the additional routes.

ERA members call for better regulatory process 03Oct06, ERAA The European Regions Airline Association (ERA) is calling for greater commitment to ensure the European Commission’s ‘Better Regulation’ principles are being put into practice.

ERA members call for unity against terrorism 03Oct06, ERAA ERA is calling for cooperation between airports, airlines and national governments to ensure the safety and security of air passengers and airline employees. Among the key aspects of the resolution is a call for the funding of anti-terrorist security to be borne by states and for airlines and airports to be involved as partners in the development and implementation of new anti-terrorist solutions.

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 6 B4 Network carriers Major Lufthansa aircraft order 06Oct06, Lufthansa website Press Releases The Lufthansa Supervisory Board approved orders for a total of 27 new aircraft. Twenty of those orders are for new long-range Boeing 747-8 jets, with deliveries scheduled to begin in 2010. A further seven Airbus A340-600 long-haul aircraft will be joining the fleet from 2008. Lufthansa has also taken out options on a further twenty of the B747-8 type. With the order placements, Lufthansa is underpinning its planned growth in intercontinental traffic and, simultaneously, replacing some of the existing aircraft in the fleet.

Iberia is committed to BA partnership 1Dec06, ATI Iberia chief executive cleared up what he described as press “misinterpretation” over stories that the Spanish carrier could be looking past its partnership with British Airways (BA) to a tie- up with Air France-KLM or Lufthansa. He claims BA is a very important member in Iberia’s shareholding. BA recently increased its stake in Iberia to 10% when it bought the 1% stake fellow alliance anchor American Airlines held in the Spanish flag carrier.

Iberia web sales up sharply in 2006 18Oct06, Iberia website Press Release In the first nine months of the year ticket sales on www.iberia.com increased by 62% from the same period of 2005, to exceed 345 million euros. 71% of the online purchases originated in Spain, representing a 55.5% increase. Sales on Iberia’s 36 country-specific web sites for Europe, Africa and the Middle East climbed by 80% in the same period, generating revenues of 101 million euros.

C Cargo and integrators

Cargologic to take over Swiss WorldCargo handling at Lugano 11Dec06, ATI Freight handler Cargologic early next year will take over Swiss WorldCargo’s staff and entire airside and landside cargo handling activities at the Lugano. Swiss WorldCargo says top priority will be given to connecting southern Switzerland to Cargologic hubs in Frankfurt and Zurich.

DHL and Atlas finalise terms of Polar partnership 29Nov06, ATI Logistics firm DHL has finalised the terms of its strategic partnership agreement with Atlas Air Worldwide through which DHL will acquire 49% of Atlas unit Polar Air Cargo. DHL is making a cash payment of $150 million for the Polar stake, of which $75 million will be handed over on closing. The other $75 million will be paid in two instalments – one on 15 January 2008 and the other on 17 November 2008.

West Air Sweden adds another five ATP freighters 24Nov06, ATI West Air Sweden is to take five additional ATP freighters on lease from BAE Systems Regional Aircraft. The five aircraft will take West Air Sweden to a total of 28 ATP freighters, reaffirming its position as a leading operator of the type. The freight specialist deploys its fleet on services for the Norwegian and Swedish Post office, as well as major integrators.

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 7 New Belgium-China ASA good for TNT 18Oct06, ATI Belgium and China have signed an air services agreement that paves the way for cargo carrier TNT to launch freighter services to China. TNT earlier planned a four-times-weekly service from its hub in Liege to Shanghai using Boeing 747-400 extended range freighters. The airline is due to get the first long-range freighter next month and the second in June. China’s Hainan Airlines currently operates a four-times-weekly passenger service from Beijing to Brussels using Boeing 767s.

FedEx seeks 10% of world’s 757-200s in 10 years 03Oct06, Flight International FedEx Express is set to acquire almost 10% of the world’s Boeing 757-200 fleet over the next 10 years to satisfy its need to replace its ageing Boeing 727-200 fleet. The US express package carrier revealed plans to acquire last week at its annual shareholders meeting in a transaction that is valued by FedEx’s board of directors at billion. The entire cost for acquisition of around 90 757-200s has been included in the company’s $3 billion capital spending budget for fiscal 2007. Production of the 757 ended last year with the delivery of the 1,048th aircraft.

D Airports

AdP to manage Oman airports Dec06, ATI Aeroports de Paris subsidiary ADP International secured a 4-year contract to manage Muscat and Salalah Airports in Oman. Both facilities were managed by BAA until the contract was terminated in 2004.

Leeds-Bradford airport to be sold ATI Nov06 The five district councils that own Leeds-Bradford Airport in the UK announced plans to sell the airport.

Bids for Exeter airport ATI Nov06 A consortium that includes UK construction company Balfour Beatty and London City Airport emerged as the preferred bidder for Exeter Airport in Devon South West .

New runway at Frankfurt Nov06, ATI Fraport is to pay €650 million to the operator of a local chemical plant which will enable the construction of a new runway to be constructed at Frankfurt Main.

New passenger terminal for Dublin Oct06, ATI Fingal County Council has approved an application from Dublin Airport Authority to build a new Terminal at Dublin Airport. Construction of the terminal is expected to start in 2007 and be completed by 2009.

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 8 E Air Traffic Management

ATM safety improving in most areas, says study 12Dec06,Flight International Eurocontrol says an independent study shows ATM safety has improved in all respects except one: the failure to improve the rate of incident reporting and data sharing. The poor reporting rate results from the lack of "just culture" protection in most European states for those who submit details of occurrences because of "institutional and legislative issues", claim Eurocontrol.

Eurocontrol future defined 21Nov06, Flight International Eurocontrol's council, representing its 37 member states and the European Commission, has adopted the "roadmap" that confirms the organisation's role in future European ATM. This is significant in view of the potential for redistribution of roles between the Commission, the growing EASA, and Eurocontrol itself.

Single Sky delays 31Oct06, Flight International Ben van Houtte, outgoing head of the Commission's air traffic management (ATM) unit and one of the principal architects of the Single European Sky (SES) regulations, highlighted the need for closer strategic alignment between Eurocontrol and the Commission as the two bodies strive to overcome continuing problems with implementing SES. He claimed implementation had faced challenges in implementation. Progress had been slower than expected, particularly on solving the dual problems of fragmentation of the system and inadequate civil/military co-ordination. He added that if the EC's planned major review of the SES in 2008 revealed that the "bottom-up" approach to improving ANSP co-operation had not worked, and so a better processes to rationalise service provision needed to be developed.

Iberia flags key industry concern 02Oct06, ATI The chairman of Iberia Group chairman identified his four key concerns for the air transport industry at the ERA general assembly in Barcelona. He identified a need for action in air traffic control, saying the current ATC system is safe, but it is very expensive. He praised the SESAR European air traffic management initiative, but emphasised how the challenges of today’s fragmented airspace will only be aggravated by traffic development.

F Safety and security

Boeing patents anti-terrorism auto-land system for hijacked airliners 01Dec06, ATI Boeing has received a US patent for a system that, once activated, removes all control from pilots to automatically return a commercial airliner to a predetermined landing location. The “uninterruptible” autopilot would be activated, either by pilots, by onboard sensors, or even remotely via radio or satellite links by government agencies, if terrorists attempt to gain control of a flight deck. According to the patent, existing preventative measures are less than fool proof. Pilots can decide to open the lockable, bullet-proof cockpit doors and federal air marshals can be overpowered and de-armed. Boeing’s alternative has an onboard processor that once activated, disallows pilot inputs and prevents anyone on board from interrupting an emergency landing plan.

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 9 UK research questions benefit of in-cockpit cameras 13Nov06, ATI Investigations into the use of cockpit-mounted cameras have led researchers to suggest that they would not be as beneficial to accident inquiries as commonly believed. The Effectiveness of Image Recorder Systems in Accident Investigations, released by UK’s CAA, details a study which explored whether investigation became easier, and findings more accurate, when video information was available. The study runs counter to recommendations by both the UK and US investigating authorities who have urged the installation of cockpit vide-recorders following accidents including the loss of the Egyptair Boeing 767 that crashed, probably deliberately, into the Atlantic, and others involving fire or smoke.

Missile protection equipment 31Oct06, Flight International High-power laser and microwave weapons and flare-based anti-missile systems are to be evaluated by the US Department of Homeland Security as potential alternatives, or adjuncts, to aircraft-mounted laser jammers to protect commercial airliners against man-portable air defence systems.

G Environment

EC formally publishes emissions-trading proposals 20Dec06, ATI The Commission plans to bring aviation into its emissions-trading scheme will apply to intra- EU flights only when introduced in 2011, but will be widened to cover all flights in and out of EU airports a year later. The EC today formally published its proposals for bringing aviation into the existing EU emissions trading scheme. The scheme will, for the first year only, apply to intra-EU flights. But it will be widened to all international flights arriving and departing the EU from the start of 2012, meaning it will apply to EU and non-EU carriers operating on these routes. To limit growth in aviation emissions, the total number of emission allowances available will be capped at the average emissions level in 2004-06

IATA urges EC to wait for ICAO standards on emissions 14Dec06, ATI IATA has hit out at draft European proposals relating to aviation’s inclusion in an emissions- trading scheme, urging the Commission to wait for global guidelines expected at an ICAO meeting next year. On 20 December the EC will formally publish its proposals for bringing aviation into the European Union emissions-trading scheme from 2011. Draft proposals put together by the EC environment directorate, not published but widely leaked, have been widely attacked by airline associations. These back emissions trading as a solution to tackling aviation’s carbon emissions, but argue the EC proposals could damage competition and prohibit industry development.

USA ready to fight over emissions trading plan 05Dec06, ATI The US last week warned that Commission proposals to extend the existing Emissions Trading Scheme to aviation breaches the 1947 Chicago Convention on international air travel, and would fail any legal challenge. A challenge could be mounted independently by an airline, by a nation state through its own justice system on the grounds of a breach of a bilateral agreements, or through the ICAO’s dispute resolution procedure.

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 10 UK business leaders fight against aviation growth curbs 04Dec06, ATI UK business leaders are countering pressure for a check in aviation growth to help combat climate change, by heralding a new report which estimates planned airport expansion will boost the country’s economy by £13 billion a year. The report has been published just days after the UK Government-commissioned Eddington Report, which similarly backed development of main international gateways as part of a wide-ranging study on transport’s role in the economy, and crucially comes ahead of the UK Government’s anticipated progress report on its landmark 2003 air transport policy document.

UK report urges global solution to aviation emissions 30Oct06, ATI A major UK report on the economic impact of climate change has stressed the importance of international solutions to tackle the issue of aviation emissions. The high profile review, by the UK head of Government Economic Service Sir Nicholas Stern, was commissioned to look at the global economic impact of climate change.

Pressure mounts on airline industry to tackle climate change 06Oct06, ATI Additional taxing of air passengers to fund the development of cleaner fuels is under consideration by the UK government, one of a number of measures it says are necessary to boost the airline industry’s contribution to meeting carbon dioxide reduction targets. The government is aiming to slash carbon dioxide emissions by 60% by 2050, and is very interested in the idea of having an air passenger duty relating to emissions. This would be channelled into a fund to develop environmentally-friendly fuel.

H Aircraft manufacturers

Bombardier FY3Q net income improves to $74m 29Nov06, ATI Bombardier Aerospace delivered fewer aircraft but generated more in revenue and orders year-on-year in the third quarter of the fiscal year, which ended 31 October. With 73 aircraft delivered - 42 business jets and 31 regional aircraft - the company generated $1.8 billion revenue, up $50 million from the same period last year.

Production woes cut into Q3 earnings at Embraer 14Nov06, ATI Embraer suffered a sharp drop in net and operating profits in the third quarter as production troubles resulted in fewer aircraft deliveries. The manufacturer says net profit fell to $61.4 million in the three months ended 30 September from $110.2 million in the same three months of last year.

Airbus woes push EADS to Q3 loss 08Nov06, ATI EADS has reported third-quarter losses and a sharp drop in nine-month earnings as it suffered from the effects of delays to the Airbus A380 programme. The European aerospace group and Airbus parent suffered a net loss of €195 million in the third quarter to end- September, compared with a net profit of €279 million in the same period last year.

Cranfield University: Quarterly Report Q4 2006 ANNEX 1: News 11