Crisis-hit air industry vaunts green agenda

FARNBOROUGH Wed Jul 16, 2008 3:15pm BST

A man passes an environment and aviation advertising poster on the first day of the Farnborough International Airshow in south England, July 14, 2008. REUTERS/Toby Melville

A man passes an environment and aviation advertising poster on the first day of the Farnborough International Airshow in south England, July 14, 2008.

Credit: Reuters/Toby Melville

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FARNBOROUGH (Reuters) - The aviation industry flaunted a green agenda at the world's biggest air show on Wednesday as high oil prices and slowing economies heap pressure on planemakers and airlines.

With strong plane orders coming only from airlines and lessors in the Gulf and Asia, Tom Enders, the chief of European planemaker Airbus EAD.PA, said the mood at the Farnborough Airshow was "contradictory."

"On the one hand, clearly we have a crisis, particularly in certain regions. On the other hand, there are still some bullish, strong airlines who are investing into new aircraft," he told Reuters.

"I think it is a sign that not all is doom and gloom, that the airline industry is not going down the drain, that we have to differentiate regionally."

While European and U.S. airlines have fallen silent, planemakers added to record order backlogs, with Asian and Gulf-based airlines and lessors dominating orders this year.

Dubai Aerospace Enterprises' $12.6 billion firm order for 100 Airbus planes on Tuesday was followed on Wednesday by a deal worth at least $7 billion at list prices for 30 Airbus A350 XWB planes and 10 options from Korea's Asiana Airlines (020560.KS).

Malaysia Airlines ordered 35 Boeing (BA.N) 737-800 single-aisle planes in a deal worth $2.6 billion. Overnight, Air China (601111.SS) independently announced a deal for 15 Boeing 777 airplanes and 30 737s planes worth $6.3 billion.

GREEN THEME

But green issues dominated the airshow on its third day as airline bosses and industry leaders joined the chiefs of Airbus and Boeing's commercial aircraft unit, who briefly set aside fierce rivalries over dwindling orders and a trade row over subsidies, to defend efforts to reduce emissions and slam European bureaucracy.

"No other industry is as responsible, united and ambitious," the head of the International Air Transport Association (IATA), Giovanni Bisignani, told a sustainable aviation conference. "I think we are facing an emergency situation."

He said fuel now represented 34 percent of airlines' operating costs, up from 14 percent five years ago. Airlines faced a fuel bill of $190 billion this year, he added.

Executives slammed the European Union's plans to include aviation from 2012 in its Emission Trading Scheme to fight climate change. The plans were misguided, they said.

Airbus and Boeing have drawn up their most fuel efficient designs ever but technological hurdles mean both are struggling to deliver the promised planes.

The A380 superjumbo is two years late and in the hands of just one carrier -- Singapore Airlines (SIAL.SI) -- while more than 50 airlines are waiting for the Boeing 787, now running about 15 months late and due in the third quarter of 2009.

Airbus has yet to cut metal on the mid-sized A350, another promised cost-beater.

Environmental campaigners Greenpeace said they remained unconvinced by the industry's record.

"The airline industry cannot be green if it pursues the expansion of airports because any gains made through more efficient aircraft will be wiped out by the increasing number of flights," Anna Jones, of Greenpeace, said.

"Alternative fuels are a pipe dream," she added.

The aerospace industry's largest showcase, held on alternate years in the small English town and Le Bourget near Paris, is taking place against a backdrop of oil prices which have given the industry an incentive to cut fuel and save costs.

Usually brimming with wheeler-dealers in sunglasses promoting the world's most gas-guzzling machines, Farnborough has been bombarded this year with expensively produced posters promoting air travel as the greenest way of crossing the globe.

The opening of the sustainability conference was briefly marred by the deafening roar of a Boeing F/A-18F Super Hornet taking off in a reek of fumes.

"That's not an environmentally friendly aircraft," Enders quipped to journalists in a media centre patrolled by police watching for any protesters.

The Airbus A380 superjumbo was parked behind billboards suggesting the 525-seat aircraft, which Airbus calls the planet's most fuel-efficient plane, is as environmentally sound as bird flight or water on a leaf.

"I applaud Airbus's commitment to join us in planting a love of nature in the minds of children and young people," Ahmed Djoghlaf, executive secretary for the United Nations Convention on Biological Diversity, said at an Airbus event.

About 350 firm orders for planes were announced during the first two days of the week-long aviation jamboree.

The opening days traditionally account for the bulk of any business. Some 600 planes were ordered in Paris in 2007.

(Additional reporting by Bill Rigby and John Bowker, Editing by Dan Lalor)