OVERHAUL THE EXPORT CREDIT SYSTEM!

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By admin October 12, 2010 14:36

OVERHAUL THE EXPORT CREDIT SYSTEM!

Air France KLM CEO Pierre Henri Gourgeon, British Airways CEO Willie Walsh and Deutsche Lufthansa AG’s Wolfgang Mayrhuber are among executives scheduled to attend a meeting of the Association of European Airlines in London this Friday. They will discuss a joint push with American rivals for a change to the export-guarantee regime and the trans-Atlantic trade agreement that enshrines it, said Christian de Barrin, a spokesman of the Brussels-based industry group.

For the past two decades, the US and Europe have agreed to withhold export credit guarantees from airlines registered in five countries where Airbus and Boeing aircraft are built: Britain, France, Germany, Spain and the US. This means many European and all American carriers are denied cheaper government-backed aircraft financing available to rivals from countries including Gulf states.

Export financing has ballooned since the credit crunch reduced banks’ willingness to lend. The share of plane deliveries covered by government guarantees more than doubled to 34% in 2009, Airbus and Boeing figures show.

“Our ability to fund the acquisition of new aircraft is handicapped by the so-called ‘home-country’ rule,” says BA spokesman Paul Marston. “These guarantees are not operating in the way they were intended, and we therefore urge the EU to amend the rules to remove the competitive distortions that have developed.” Lufthansa called for an end to “market imbalances” resulting from export-credit financing, saying “basic rules of regulatory policy are being disregarded.”

admin
By admin October 12, 2010 14:36
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