US airlines raise the stakes in dispute over planned EU aircraft noise rules

Date: 04/02/1999

By Chris Johnstone

US AIRLINES are threatening to escalate a simmering trade dispute between the EU and Washington over proposed new rules to clamp down on noisy aircraft.

Northwest Airlines, one of the US' five major carriers, has complained to the US department of transportation about proposed EU measures which go beyond existing international rules on aircraft noise.

The US airline claims that the resale value of its fleet, some of which has 'hush-kit' equipment designed to cut noise levels, would be lowered by moves to restrict the use of these aircraft in Europe.

If US transport officials rule against the Union, this could spark retaliatory action by Washington. Some diplomats are even suggesting that a ban could be imposed on transatlantic flights by the Anglo-French supersonic jet Concorde. The beak-nosed aircraft is only used by Air France and British Airways, but it has a symbolic status and is an attractive marketing tool for both companies.

Such a move by the US would exacerbate trade tensions at a time when Washington and Brussels are tussling at the World Trade Organisation over the EU's import regime favouring banana exporters from former colonies.

The two blocs are also bickering over whether each is doing enough to take up the slack of cheap exports produced by, or turned away from, struggling Asian markets.

Hush-kits are only produced in the US, mainly by a subsidiary of international delivery company Federal Express, and are almost exclusively used on American aircraft. “We see this less as an environmental issue and more one about market protection,” said a US diplomat. “This measure appears to protect the sales of some types of Airbus Industrie aircraft.”

The four-nation European Airbus consortium is the only world-wide rival to the Seattle-based plane manufacturer Boeing, which is struggling to cope with its worst fall in market share for years.

Northwest's legal move comes as companies within Europe are also pressing for changes to the EU's proposed aircraft noise rules, which were agreed by transport ministers at the end of last year.

British Socialist MEP Eluned Morgan claims the proposed new regulations threaten to dash plans by Irish carrier Omega Air to create more than 400 jobs in her mid-Wales constituency. Omega plans to 're-engine' old passenger aircraft for use in cargo operations, but the new noise rules would prevent this.

Morgan has tabled an amendment to the proposals, to be discussed by the European Parliament at its plenary session next week, which would dilute the proposed directive and give national aviation authorities more discretion over what noise standards should apply in their airspace.

US diplomats say the proposed amendment is a step in the right direction, but insist that the Union would have to do more than that to meet its demands.

One of Washington's major complaints is that the EU's proposed noise rules would seriously damage the sell-on value of American aircraft fitted with hush-kit equipment.

Although hush-kitted aircraft which were operating in Europe before April 1999 would be able to continue doing so if they remained under the same ownership, they could not be sold and registered for use in the EU by another airline. Opponents warn that this could knock 20&percent; off the value of these aircraft.

The US argues that the Union should have proposed changes through the International Civil Aviation Authority instead of acting unilaterally.