BERLIN, June 8 (Reuters) – Aerospace group EADS (EAD.PA) will have a key showcase at the opening of the Berlin Air Show as it parades its embattled A400M military transport and prepares to announce a major new sale of its flagship A380.
But even as German leaders prepared to open the show on Tuesday, the rest of the airline industry was readying a stiff response to the government’s new plan for a tax on passengers.
One of the industry’s chief economists has called the tax “a revenue-raising exercise … in environmental clothes”. [ID:nLDE6561E9]
The Berlin show is a biennial event that tends to be overshadowed by larger shows elsewhere, but EADS’ Airbus unit will use it as a platform to show it can finish and sell the A400M, the massive plane on which it has bet much of its future.
It will also be a venue for news on the A380 passenger model. Berlin Air Show officials said Airbus will sign a contract for new orders with Dubai’s Emirates [EMIRA.UL] on Tuesday afternoon, with German Chancellor Angela Merkel present.
At a list price of $346 million per plane, the deal could be worth more than $10 billion if reports by media including France’s Les Echos of a 30-plane order prove accurate. [ID:nLDE6531SM] <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Special Report on the A400M [ID:nLDE656149]
Timeline of the A400M [ID:nLDE61O0WG]
Factbox on the A400M [ID:nGEE5B92KT] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
FLAGSHIP COMPANY
Emirates, the Arab world’s largest carrier, became Dubai’s flagship company and one of the biggest contributors to the local economy after the property crisis devastated real estate firms. The government-owned group expects to earn $1.16 billion in 2010.
The carrier, which started in 1985 with two planes, has grown to rivals such as Qantas (QAN.AX) and Singapore Airlines (SIAL.SI) for passenger traffic between Europe and east Asia.
The A400M, which has cost EADS billions of dollars in cost overrun charges, will also be at the show. EADS said last week the two planes in testing were working well and two more test planes should go into service this year.
Airbus chief Tom Enders told an industry dinner packed with airline CEOs on Monday night he would gladly sell any of them an A400M — drawing laughs but no obvious takers.
Instead, most at the dinner spent the evening discussing Germany’s air travel tax proposal, announced on Monday afternoon during the International Air Transport Association’s annual meeting in Berlin.
The tax would raise up to 1 billion euros ($1.3 billion) a year with a levy on domestic departures.
Enders remarked that Merkel “had impeccable timing” with the announcement, coinciding as it did with IATA’s meeting on her home turf. The airline body said on Tuesday it was preparing a fuller response to the tax, which it is expected to present later on Tuesday as its AGM wraps up.
But IATA Chief Economist Brian Pearce underlined the industry’s expected position in a press briefing. “The last thing the industry needs here in Europe is additional taxation,” he said. (Addtional reporting by Thomas Atkins in Dubai; Editing by David Holmes) ($1=.7453 Euro)
