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Winners and losers

British Airways will face the largest shortfall of European Union carriers at 3 million tonnes of carbon dioxide in 2012, while US carriers Delta Air Lines and United Airlines will face even higher levels, says the RDC/Point Carbon study.

RDC Aviation managing director Peter Hind explains how carriers that have enjoyed only a relatively gradual increase in growth by revenue tonne kilometres since 2006 are likely to face a disproportionately larger shortfall than those experiencing more rapid expansion over that period, as faster-growing carriers will claim a larger share of the available allowances within the EU emissions trading scheme.

BA 747 
 © Max Kingsley-Jones/Flightglobal
BA could be hard hit by CO2 shortfall

Hind says US carriers could be particularly hard hit if the transatlantic market remains weak next year but rebounds by the time emissions trading begins in 2012, while legacy carriers are in general likely to be harder hit than low-cost rivals that have grown rapidly since 2004-6. "It's the impact of LCCs eating up the cake," says Hind.

However, low-cost carriers face one particular challenge in that the allowances are based on weight, which includes freight. "As low-cost carriers take passengers only and no freight, they face a relatively larger shortfall," says Hind. "Many low-cost carriers have aggressive growth plans as well, which could increase that shortfall."

But he also notes that low-cost carriers with significant growth plans may be eligible for more allowances from a special 3% allowance reserve for new entrants and fast-growers.

A further option for airlines to ease the cost burden is by investing directly in clean development mechanism projects, allowable under the Kyoto Protocol, which provides a discount on carbon prices.


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