The three aircraft makers signed a memorandum of understanding at the Air Transport Action Group (ATAG) Aviation and Environment Summit in Geneva, Boeing said in a statement.

"Two of the biggest threats to our industry are the price of oil and the impact of commercial air travel on our environment," Boeing CEO Jim Albaugh said.

A new EU law that took effect from January 1 makes it obligatory for airlines flying in and out of the region to buy carbon permits to offset their emissions.

However, a trade war is brewing with the United States, China and India -- the top three carbon emitters -- questioning the EU's legal jurisdiction to charge for an entire flight.

(Reporting by Megha Mandavia in Bangalore; Editing by Sriraj Kalluvila)

• A Permanent Economic Emergency