China airlines to challenge EU carbon tax: report

(BEIJING) - Chinese airlines plan legal action against a European Union plan to impose a carbon tax from 2012, claiming it could cost them millions of dollars a year, state media said Thursday.

China's aviation sector will have to pay an additional 800 million yuan ($122 million) a year after the EU starts levying a carbon emissions tax from next year on flights originating or landing in Europe, the Beijing News said.

The report, citing figures from China's aviation regulator, said the cost could hit three billion yuan a year by 2020.

China's top three airlines -- Air China, China Southern and China Eastern -- plan to jointly lodge a legal case with the China Air Transport Association, the industry group's secretary general, Wei Zhenzhong, was quoted saying.

Hainan Airlines, another large carrier, may also take part in the litigation, the report said, without providing details on where the industry association would launch the legal action.

"The process of the lawsuit will last for a very long time," the report said, citing an unnamed aviation industry source.

"The aviation industry is only slightly profitable. The air companies are very likely to pass the costs on to the passengers."

Officials at the airlines were either not aware of the legal action or were not available to comment when contacted by AFP.

The price of a ticket from China to European countries will probably rise by 200 yuan if the lawsuit is protracted and the Chinese airlines are forced to pay the tax from January 1 next year, the report said.