Release #: 15.02
February 15, 2015

ALPA to Ex-Im Bank: Turn Down Norwegian's Financing Request

WASHINGTON—The Air Line Pilots Association, Int'l (ALPA) today called for the U.S. Export-Import Bank to reject Norwegian Air Shuttle's application for aircraft financing, stating in a filing joined by Delta Air Lines and Hawaiian Airlines that the bank has not performed an assessment required by Congress to determine the effect its lending could have on U.S. airlines and their workers.

"The U.S. Export-Import Bank's below-market financing saves foreign airlines millions of dollars in financing costs when purchasing widebody airliners," said Capt. Tim Canoll, ALPA's president. "These foreign airlines then use these U.S. taxpayer-subsidized state-of-the-art aircraft to compete with U.S. airlines in the international marketplace."

Congress requires the bank to evaluate the financing requests it receives to identify potential harm to U.S. airlines and their workers. "It appears that the bank has not performed the Congressionally-mandated analysis," said Capt. Canoll. "Without it, we can't determine the extent of the adverse effect granting Norwegian's financing request would have on U.S. industry and workers. As a result, the bank must reject this financing request."

In the past, the U.S. Export-Import Bank has supported more than one billion dollars in financing for Norwegian's short-haul and long-haul aircraft. All of Norwegian's B-787s have received U.S. government financing support. In addition to the direct financing cost savings, Ex-Im Bank support allows foreign airlines like Norwegian to purchase new aircraft that are more fuel efficient and attractive to customers, compounding the economic advantage they receive from the U.S. government financing.

In the case of Norwegian, the airline is seeking additional Ex-Im Bank financing while at the same time pursuing efforts to serve the United States via an Irish subsidiary called Norwegian Air International (NAI), which is based on a business model that seeks to avoid tax and employment laws and circumvent international agreements to gain an unfair competitive edge against U.S. airlines and their workers in the global marketplace. NAI has applied to the Department of Transportation (DOT) for a foreign air carrier permit that would allow it to serve U.S. markets, triggering broad bipartisan concern and opposition from Congress. In September 2014, the DOT dismissed NAI's request for a temporary foreign air carrier operating authorization, which would have allowed it to operate to U.S. markets while its permit application is pending.

"The Ex-Im Bank must conduct the economic review Congress requires and ensure that U.S. industry and jobs aren't compromised by its response to financing requests such as this application from Norwegian Air," continued Capt. Canoll.

ALPA supports the mission of the Ex-Im Bank. However, the union is calling for targeted reforms to address the competitive imbalance that its lending practices create, particularly in the area of the U.S. government's provision of widebody aircraft financing for foreign airlines that receive state support or pursue business models that conflict with U.S. law and international policy.

Founded in 1931, ALPA is the world’s largest pilot union, representing more than 51,000 pilots at 30 airlines in the United States and Canada. Visit the ALPA website at www.alpa.org or follow us on Twitter @WeAreALPA.

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CONTACT: ALPA Media, 703-481-4440 or Media@alpa.org