MTUAY MTU Aero Engines AG (PK)

European aircraft manufacturer Airbus and a group of eight suppliers and customers Monday publicly released the letter they sent to leaders in France, the U.K., Germany and Spain asking them to act to stop a conflict with China and other countries that oppose the new European carbon rules.

Last week, China's ambassador to the European Union said it "makes sense" for Chinese airlines to shun planes made by Airbus in favor of competing models from Boeing Co. (BA) because of the EU's new levies on aviation greenhouse emissions.

Louis Gallois the chief executive of European Aeronautic Defence & Space Co. (EAD.FR), the parent company of Airbus, said Chinese authorities are withholding final approval of EUR12 billion worth of Airbus orders.

Under the EU program, known as European Emissions Trading Scheme, any airline operating at an EU airport must hold special credits to offset its carbon-dioxide emissions since the start of this year. Airlines have said that their inclusion in the ETS, which already covered many EU industries, will cost them billions of dollars annually.

The top officials of the nine companies "expect the list of suspensions, cancellations and punitive actions to grow as other important markets continue to oppose the European Trading Scheme," the letter said.

They said a global solution for aviation carbon emissions is better than a system imposed unilaterally in Europe.

The letter was signed by CEOs from Airbus suppliers Safran SA (SAF.FR) and MTU Aero Engines (MTX.XE) and airlines Air Berlin (AB1.XE), Air France, International Consolidated Airlines Group SA's (AG.LN) British Airways and Iberia, Deustche Lufthansa AG (LHA.XE) and Virgin Atlantic.

-By Inti Landauro, Dow Jones Newswires; +33 1 4017 1740; inti.landauro@dowjones.com

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