How Emirates Gets Cheaper Planes than Delta
Why do Delta and other U.S.
airlines pay more than state-owned foreign airlines from wealthy nations for the
same Boeing aircraft? Ted Reed’s article in
Thestreet.com provides an
excellent overview of the “lingering puzzle” of the Export-Import Bank of the
United States’ aircraft financing practices.
ALPA led the fight for stricter rules on the Ex-Im Bank last year, and
legislation was signed into law that requires the bank to perform an economic
analysis to assess the effect of bank financing decisions on U.S. airlines and
its workers. However, the bank continues to approve low-cost financing for
airlines at the expense of U.S. airlines without conducting such an analysis,
and ALPA is now
pursuing legal action against the bank.
As Reed points out, the airlines benefiting from Ex-Im
deals are hardly struggling and this raises the question of why U.S. taxpayers
should be subsidizing their purchase of aircraft. He states, “Rather, the list
includes Emirates Airlines and Etihad Airways, which are owned by the wealthy
governments of Abu Dhabi and Dubai; LATAM Airlines Group, operator of the
largest airlines in Chile and several other South American countries; LOT Polish
Airlines and Korean Air Lines. None of them are from economically disadvantaged
third-world countries. In fact, all of them get more backing from their
country’s governments than U.S. airlines do.”
Additionally, U.S. airlines are ineligible from receiving any preferential
financing on Airbus aircraft from European banks, which also provide Ex-Im style
subsidies. Thus, “the entire world can hold hands and join together in
discriminating against U.S. airlines.”
Read the Ted Reed article.