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AVIATION

Hollande ‘to clinch’ $12 billion jet deal with India

France's Dassault Aviation hopes to conclude its $12-billion deal to sell Rafale jets to India this year, with negotiations set to be taken up by President Francois Hollande next week.

Hollande 'to clinch' $12 billion jet deal with India
A Dassault Rafale fighter jet, pictured in December 2011. Photo: François Nascimbeni/AFP

"The ideal would be to sign it in 2013," Dassault chief executive Eric Trappier told AFP in an interview about the world's biggest defence deal at India's air show in Bangalore.

"It's not that surprising that it takes a bit of time," he said, pointing out that the contract involved production of 126 state-of-the-art fighters in France and India over a 15-20 year period.

He also confirmed Indian negotiators had detailed their needs for an additional 63 planes beyond the initial order of 126, as reported after a visit by India's Foreign Minister Salman Khurshid to Paris in January.

"It's to let us know that they'll need the assembly lines for a long time," he said.

Hollande is to visit New Delhi on February 14-15 on his first trip to India since being elected in May. Trappier will be in the delegation. "I don't think there are military aircraft sales without good political relations," said Trappier.

Dassault is one of the big names at this week's Aero India as it shows off the Rafale which beat competition from six rivals from Russia, the US and Europe last year.

Exclusive negotiations are under way to determine the final price and amount of technology transfers, with Indian Defence Minister A.K. Antony giving an indication of the complexities involved in news conference on Wednesday.

The deal will have to pass through "six or seven layers" of vetting before being presented to the finance ministry and the cabinet committee on security.
 

Antony, seen as a clean operator in India's notoriously dirty politics, also said his officials would ensure "no malpractice is there" and denied budget cuts in his ministry would have an impact on "the mother of all contracts".

France is desperate to make its first foreign sale of the Rafale, which has struggled to find buyers after investments of tens of billions of euros.

The conclusion of the deal has been repeatedly delayed. India initially set a target of the end of last year, which slipped to the end of the current fiscal year in March.

Hollande will be followed days later in Delhi by British Prime Minister David Cameron who has lobbied on behalf of the Eurofighter, a rival jet made by a partly British consortium which is ready to step in if Dassault fails.

Under the proposed Rafale deal, the first 18 aircraft are to be made in France with the remainder to be produced under licence by Hindustan Aeronautics Limited (HAL), the state-run Indian aerospace behemoth.

Dassault must conclude licence deals with about 20-30 different Indian partners, according to Trappier. "We've done more than half of the work so far," he said.

The French group has also formed a joint venture with the Indian conglomerate Reliance, which has no former military production experience but will be involved as a supplier.

Indian Foreign Minister Khurshid likened the negotiations to a fine French wine while in Paris. "The contract details are being worked out. A decision has already been taken, just wait a little for the cork to pop and you'll have some good wine to taste," he said.

The Rafale has carried out bombing missions in Afghanistan, Libya and most recently in Mali, where it is currently flying sorties targeting Islamist militants.

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AVIATION

‘Polluter pays’: France to propose new tax on flights in Europe

France on Thursday will propose a new tax on flights in Europe to encourage travellers to switch to less polluting forms of transport, a source in the transport ministry told AFP.

'Polluter pays': France to propose new tax on flights in Europe
The French government will propose that the European Union adopt a new tax on air travel. Photo: AFP
The airline sector is coming under increasing pressure from so-called “flight shamers” and climate change activists who point to the industry's large carbon footprint.
   
The French government will propose that the European Union adopt a new tax on air travel, which could be in the form of an extra levy on fuel or tickets, or changes to the European carbon emissions trading system.
   
“Different charges could be considered to reinforce the principle of 'polluter pays' and France believes that they should be weighed up in order to find the best way of doing it,” the source said on Wednesday.
 
“Given the scale of the climate challenge, France believes that we need to go further and more quickly,” the source added.
 
Charles de Gaulle airport. Photo: AFP
   
The UN's International Civil Aviation Organization estimates commercial flying is responsible for two percent of global CO2 emissions and EU figures show it as the most polluting form of transport per kilometre (mile) travelled.
   
But the head of airline industry body IATA, Alexandre de Juniac, defended his members at an annual meeting of the organisation in South Korea this week.
   
He acknowledged that the sector was under pressure to act, but said that the public was unaware of efforts being made by the industry, including the use of new fuel-efficient airliners and biofuels.
   
He also criticised the idea of new “green taxes” which he said were normally collected by governments and used for non-environmental ends.
   
The industry is likely to fight against any new taxes in Europe given that it is already subject to the EU carbon emissions trading system and, from 2020, to a new global mechanism called the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). 
 
Calls to boycott air travel have grown in recent years in step with growing awareness about the dangers of climate change.
   
“Flygskam”, or flight shame, has become a buzz word in Sweden in reference to the guilt felt over the environmental effects of flying, with more and more young Swedes opting to travel by train to ease their consciences.
   
Spearheading the movement for trains-over-planes is Sweden's Greta Thunberg, the 16-year-old climate school striker who refuses to fly and travelled by rail to the World Economic Forum in Davos this year. 
   
French President Emmanuel Macron is also keen to boost his own green credentials, having suffered an embarrassing resignation of his star environment minister last year who accused the head of state of failing to act.
   
The French Green party also surged in last month's European Parliament election, finishing third behind Macron's centrist Republic on the Move party and the far-right National Rally.
   
Macron's record of persuading his EU partners to adopt new taxes is mixed, however, after he failed to convince them to create a new EU-wide levy on internet and technology groups such as Apple and Amazon.
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