Europe's controversial action on hushkits could be just the start, as the region prepares to break international ranks to tighten up controls on noise and pollution.

Europe's moves to suspend hushkitting have already caused one transatlantic row. But more controversy is in prospect as the European Commission (EC) prepares to release a wide-ranging policy document, Air Transport and the Environment. It is widely expected to include still tougher proposals on noise and emissions.

What worries many in the industry is Europe's apparent readiness to go it alone. Brussels has always strongly asserted its preference for the International Civil Aviation Organisation (ICAO) as the key agency for formulating noise and other environmental standards. At the same time, the EC has made clear that it will adopt its own, more stringent, standards where it considers ICAO's efforts to be inadequate.

That has been demonstrated by the action on hushkits. Under ICAO standards it is possible to extend the life of Chapter II aircraft by hushkitting their engines to meet the Chapter III noise standards. European legislation, approved by the European Parliament and in the process of being ratified by the member states, effectively rules out this option for many engines.

The ban, which applies to EU-registered aircraft from April 1999 and non-EU-registered aircraft from April 2002, demands an engine by-pass ratio of three to one on the grounds that the higher ratio engines are more environmentally friendly. Europe argues that it is simply promoting the use of a new generation of quieter and - at least on take-off - more fuel-efficient powerplants.

Concorde ban threat

Washington, which has retaliated with the threat to ban Concorde from landing in the USA, has accused the EU of deliberately favouring European manufacturers and airlines. The USA is the sole supplier of hushkit technology and the Pratt & Whitney JT8D - fitted on the ageing first generation Boeing 737 and McDonnell Douglas DC-9s - will be heavily penalised by the new EU rule.

The US administration also claims that, as a result of the EU ban, the resale value of Chapter II aircraft revamped as Chapter III airliners will fall by at least $1 billion worldwide. With their large domestic fleets of older narrowbodies, US airlines stand to sustain a large part of these losses. Northwest Airlines, which triggered the USA into action with a complaint to the EU in January, has a fleet of 50 hushkitted DC-9s. In theory it stands to make substantial losses from the ban.

Although US airlines have accused the EU of restricting the access of US operators to Europe in contravention of the Chicago convention and bilaterals, US hushkitted aircraft already flying into the EU can continue to do so. The number of transatlantic routes flown using US hushkitted Chapter II aircraft is small - no more than 10 aircraft are in operation, say US airline industry sources. All indications are that the trend is moving away from the use of such aircraft.

European airlines, in contrast to North America, have less than half the number of hushkitted aircraft as the Americans and, according to the EC, they have little desire to use them in the future.

However, for US airlines these material issues take second place to the belief that by its unilateral action, the EU is undermining global standards, a stable operating environment, and therefore the foundations of the global aviation system. "What if a similar organisation in Asia proposes different operating standards as well?" asks Northwest.

According to John Meenan, senior vice-president of industry policy at the US Air Transport Association (ATA), the EU, by "undercutting the the ICAO process", is setting an "extremely dangerous precedent". He says that the world aviation industry is "looking closely at what the EU is doing on the noise front. If it signifies other measures on environmental issues, it will further fracture the industry".

The EC denies US charges of favouring European manufacturers and airlines, with one senior official retorting that the USA has simply "taken umbrage". It also refutes US claims that it is breaking internationally agreed environmental standards laid down by ICAO. Brussels claims it could have been even tougher, arguing that it is only demanding a freeze, rather than a phase-out, of hushkitted aircraft.

But, as if unsure of its case, the EC has prepared a second line of defence - its "obligations" to the World Trade Organisation (WTO) Agreement on technical barriers to trade, which provides for human health or environmental protection objectives.

Fragmented standards

So far, IATA, which might be expected to speak up for those airlines in the less-developed regions of Eastern Europe and Africa, where operations are most seriously affected be the ruling, is keeping a low profile. "IATA does not want to take sides on the hushkit debate," says Leoni Dobbie, director of environment. Like her colleagues at European Regional Airlines Association (ERA) and Association of European Airlines (AEA), she is unsure whether the EU is breaking rules.

IATA wants to "avoid regional measures", and says that the CAO remains the body through which environmental standards should be set.

"The obvious solution would be for ICAO to try to resolve the dispute. Many parties in the argument would like ICAO to step in," says Dobbie. But the ICAO is only as good as its component parts and does not have any "enforcement capability. It is not a global policeman", she says.

Airport action

European airlines, faced with a growing problem of locally imposed noise restrictions, say ICAO inaction has forced Europe to come up with a regional solution.

"We do not welcome the EU's unilateral hushkit ban," says Le Thi Mai, general manager of infrastructure and the environment at the AEA. "Nevertheless, we do not oppose it," she says. "We are realistic enough to see that the EU is obliged to take this measure. If you don't have an EU framework, then European airports go ahead with local measures," she says, citing London Heathrow, Copenhagen and Paris among major hubs that have imposed their own noise caps. "In the absence of a framework, we could not challenge airports.

"It is ICAO's failure. If it cannot solve regional problems it has to accept regions solving their own dilemmas."

In Brussels, the "regional" approach is far from exhausted. Further measures to curb airport noise are in prospect, associated with the development of a noise classification system for airports. Serious thought is being given to ways in which airports and airlines might reduce noise by direct routings, avoidance of holding in the air, and improved noise abatement procedures for take-off and landings.

In 2001, ICAO is expected to approve tougher aircraft noise certification standards, but if it does not, then the EU is likely to move ahead alone in this area.

European airlines are in no doubt about who is to blame for ICAO's failings. "The Americans do not have a noise problem. That's why the EU decided to go it alone," says Barbara Ambrose of the ERA.

AEA's Mai says: "The USA spends its life breaking international rules. Because it is a superpower, it thinks it can do it. But do the rest of us have to shut up?"

Airports, which are finding it increasingly difficult to expand traffic without delivering promises to local residents and their political representatives of containing noise levels, are even more positive about the EU initiative. In a recent statement, the Airport Council International (ACI) Europe described it as "a contribution towards preventing a further proliferation of noise-related operational restrictions at individual airports" and for helping to "create additional capacity to enable the industry to grow".

However, nothwithstanding the EU's tougher stance on noise, airports say they want to retain the freedom to impose new limits as growth and political pressure dictates.

The USA has gone some way to resolving problems, argues the ATA. As a result of anticipating by two years ICAO's 2002 deadline for phasing out Stage II aircraft, through an accelerated hushkitting process, US airlines persuaded airports to "basically agree they would no longer set ambitious noise limits without first going through a federal [consultation] process," says Meenan. "I can see no evidence of that happening in Europe," he adds.

As European airlines are at pains to point out, resolving a noise problem in Europe is not as easy as in the USA. European airports tend to be closer to dense centres of population than in other parts of the world. Some optimistically argue that noise has tended to attract decentralised solutions because its impact is essentially local. Other environmental problems, the argument goes, should not be simpler to resolve on a global scale. Yet locally set emissions-related charges, either already introduced or envisaged in Switzerland, Norway and Sweden, are growing in popularity in Europe. According to Avi Gil, director of environment at the ACI, "there may be more [of such charges]", because ICAO has "dragged its feet" on setting tougher limits on nitrogen oxide emissions. The ACI had wanted a 20% reduction in NOx to be imposed on all new engine designs after 2003, but ICAO aimed lower, agreeing to 16% in March. The ICAO risks being under fire once again, following the resolution of governments at the Kyoto summit in December 1997 to pass the responsibility of overseeing the aviation industry's small contribution to cutting greenhouse gas emissions.

Navigation charges?

In Brussels, officials are thought to be leaning away from proposals to cut emissions by taxing kerosene. Instead, serious consideration is being given to a navigation charge system designed to discourage operators of less environmentally friendly aircraft. There are also suggestions that dirtier and noisier aircraft could be discriminated against in slot allocation. At the same time, the EC favours the formulation of a voluntary agreement on emissions with the industry.

More immediately, the likely outcome of the present international dispute over the hush-kit ban is still unclear. On 24 March, US Secretary of Transportation Rodney Slater was due to meet EC officials to try to resolve the issue. But the EC has stated that Europe was unlikely to be deterred from imposing the ban.

As long as the world industry fails to agree on environmental controls that go a long way towards satisfying its most demanding members, there is every chance that Europe, and perhaps other regions too, will have little option but to continue going their own way.

Source: Airline Business