ETIHAD CHIEF ATTACKS “COLONIAL” AIRLINES ON ISSUE OF EXPORT CREDIT

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By TESTCustomwebLP TESTCustomwebLP November 29, 2010 20:52

ETIHAD CHIEF ATTACKS “COLONIAL” AIRLINES ON ISSUE OF EXPORT CREDIT

Australian chief executive of Etihad Airways, James Hogan has hit out at European and North American airlines which are lobbying for export credit to be withdrawn from airlines in developed countries. He said to a national newspaper: “Why do European and North American airlines have the colonial right to rule the world? … We have to be careful that one or two airline CEOs with vested interests don’t blow this issue out of proportion.”

Cash rich Middle Eastern carriers have come under fire from airlines located in the Home Rule countries – UK, Spain, France, Germany and US – who say they should not have access to cheap export credit guarantees as a form of aircraft finance because it is an unfair subsidy.
Hogan, said rather than campaigning against Middle Eastern carriers, the airlines should be canvassing for the reform of the global aviation industry to ensure true open skies and free competition.

“There isn’t a truly open skies environment,” he said. “I think there’s a more compelling argument in regard to truly open skies than trying to target a group of Gulf carriers.”

Currently export credit guarantees accounts for 14% of the mix of aircraft financing Etihad uses, which it would like to continue to use to finance some of the 106 aircraft due for delivery by 2020.

Hogan is unhappy with the Aviation Alliances’ proposals to cap export credit agency-backed loans to 20% of any airline’s or lessor’s aircraft deliveries, and raise the cost of this type of financing.

The Etihad chief says caps will reduce the attractiveness of export credit and will lead to a greater mismatch between aircraft order commitments and the availability of financing, and could be harmful in the event of a future financial crisis.

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By TESTCustomwebLP TESTCustomwebLP November 29, 2010 20:52
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