Delta, American, Southwest, Air France-KLM and British Airways are among a group of airline that have joined in a protest against export credit subsidies for non-home countries that buy Boeing and Airbus aircraft. Airlines located in countries that manufacture the aircraft – so the US, UK, France and Germany – are exempt from tapping the cheap source of finance, which they say is creating an un-level playing field. Although this has always been a source of friction between airlines, the lengthy period of economic downturn, where cheaper finance for airlines has all but dried up, has made the dichotomy all the more biting.
The US Air Transport Association is explaining its case to US government officials this week. It says the loan guarantees unfairly help foreign competitors and lead to overcapacity in the market.
"Major airlines like Emirates and Korean (Air) — strong carriers from strong countries — they're getting subsidized financing and coming in and competing against us," said David Berg, general counsel of the airline group to The Wall Street Journal.
The open skies agreements between US and 100 countries have resulted in many more airlines entering the US market, which because those airlines benefit from export credit, the ATA argues, is unfairly penalizing US carriers.
Since 2000, the amount of commercial aircraft loans backed by the US Export-Import (Exim) Bank has jumped from $3.3 billion to $8.6 billion in 2009.
See Aviation News October 4 for Boeing’s response to the ATA’s letter to Congress https://www.aviationnews-online.com/regulatory/boeing-responds-to-ata-letter-to-congress-on-exim-financing/.