The Street Opinion – Why Delta Pays More than Emirates for Boeing Planes

by Adam

The Street has an interesting opinion piece by Ted Reed that discusses the recent lawsuit filed by Delta, Hawaiian, and the APA against the Export-Import Bank of the United States (Ex-Im) and whether their arguments have any merit:

Of course, Ex-IM underwriting loans to airlines from poor countries, if those airlines are unable to obtain reasonable financing on their own, makes sense because efficient air service is a key component in assuring a country’s financial viability. As the world’s leading power, the U.S. has long assumed a responsibility to assist poorer countries in building their economies. But the Ex-Im Bank’s airline clients over the past 10 months are hardly poor. 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.

It’s important to note that Airbus provides identical funding, but US airlines cannot take advantage of those government-backed loans:

Here the point is often made that European banks do the same thing for Airbus customers. In other words, the other guy does it, so we have to do it too! It is probably worth noting that U.S. airlines are not eligible for government-backed financing when it comes to buying Airbus jets. Thus, the entire world can hold hands and join together in discriminating against U.S. airlines.

You can check out the full opinion piece here.

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Bobo April 15, 2013 - 5:12 pm

While certainly unfair, hard to shed any tears for Delta, actually kind of makes me happy to see the tables turned

Kris Ziel April 15, 2013 - 10:19 pm

It’s absolutely ridiculous that government supported airlines like Emirates can get a plane for 10-20% cheaper than Delta, United, etc. through exim.


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