The United States Export-Import Bank is the government faction designated to persuade foreign buyers to purchase American made products. This is done in many ways, primarily by guaranteeing loan repayments and providing low-interest federal export financing. As an example, Quatar Airways ordered 30 Boeing 787-800 model aircraft outfitted with General Electric engines. The The United States Ex-Im bank provided them with loan guarantees and financing, while Delta Airlines, who ordered 18 787's, had to fend for themselves. While effective in generating business and revenue for local businesses like Boeing and many of its sub contractors, many consider this to be unfair to United States companies who are purchasing aircraft from their own country.
You can read more about Delta Air Line's challenge to the Ex-Im bank here.
In my personal opinion, the Ex-Im bank should continue to provide these incentives to foreign air carriers. While Boeing does make quality aircraft to compete with Airbus, The Ex-Im bank is clearly assisting in Boeing's sales. At the same time; however, the government should be providing local air carriers with some incentive as well for providing more jobs to the United States citizen, instead of not offering any support for aircraft financing. With the government helping out our local carriers, we can help "level the playing field" with our foreign competitors.
Thanks for reading, and fly safe!
I agree that the playing field should be leveled. However, cheap loans are not the only competitive advantage that foreign air carriers have. Middle Eastern carriers are able to obtain fuel at a mere fraction of the cost of US carriers. We need to fix this too!
ReplyDeleteHmmm, I don't feel it is the Ex-Im banks responsibilty to provide low cost funding nationally. They only exist to support the import export market of U.S. goods. Perhaps thier lies a problem in our local banking system that does not provide low cost financing to U.S. consumers of U.S. produced goods.
ReplyDeleteI like your idea of an organization helping U.S. carriers with funding, however, I don't think it should be our federal government. I think it should be a privately owned operation similar to the Ex-Im Bank.
ReplyDeleteWhat I worry about is how this might effect safety. With foreign carriers doing a lot more domestic flights I can’t help but wonder how SOPs might be effected and how safety might become an issue. After all; isn’t safety suppose to be the primary concern for everyone?
ReplyDeleteI do not agree that the bank persuades people or I would not word it as a faction.
ReplyDeleteWe are already seeing the effects of safety because every time a foreign carrier screws up (crashes) the manufacturer gets to fix the problem. They make them more user friendly for everybody else.
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