US ExIm financing under attack again; killing it would aid Airbus

US Export-Import financing is under attack again by Delta Air Lines and Republicans.

We understand why Delta is opposed. It believes that ExIm financing of Boeing aircraft to competitors puts it at an economic disadvantage.

But fees charged by ExIm made financing more costly and “market rate,” a move intended to remove the financing advantages. Some airlines, in fact, chose alternative financing as a result.

Delta claims ExIm hasn’t taken into account the impact on losing American jobs. We find this a stretch, since Boeing out-sources thousands of jobs with its industrial partnerships (particularly on the 787) and supply chain contracts. At one time, we seem to recall Delta out-sourced jobs to non-US locations.

Be that as it may, at least Delta has its self-interest at stake and one can’t truly fault the airline for this. But the Republicans are another matter. Although ExIm finances a variety of US industries, Boeing is the prime beneficiary and some Republicans claim this is nothing more than corporate welfare.

ExIm, which has been around since the Great Depression, provides financing that is similar to European export credit support offer to Airbus customers. If Republicans succeeded in killing ExIm (or if Delta does), then Airbus will have a clear advantage.

This falls into the category of “what are they thinking??”

Separately:

LCC airline news: AirAsia bid draws scrutiny; WestJet goes upscale; M&A potential

There are two items of note for low-cost carriers that we find interesting:

  • AirAsia’s bid to buy Batavia Air looks like it is to become a political football, according to this article in the Wall Street Journal.
  • Canada’s WestJet is adding premium coach class to its long-standing single-class service. We find this one particularly interesting.

Then there is this analytical piece from Seeking Alpha about a variety of potential mergers.

More Odds and Ends: Aircraft list prices, airline break-even

Aircraft List Prices: It took some doing, but we’ve collected the list prices of all the major commercial airplanes. The comparisons are interesting. We’ve tabulated these into seat categories.

List prices, of course, have no relationship to what customers actually pay. Discounts of 25%-30% are common and really good customers–like Southwest Airlines for Boeing–have been known to get discounts of up to 60%.

There are several notables in this list:

  • Compare the pricing of the C919 and the MS-21 to the Airbus and Boeing products;
  • Compare the Q400NG to the ATR-72-600;
  • Compare Airbus to Boeing; and
  • Compare CSeries to 737-600/700 and there isn’t that much difference; the gap is wider compared with Airbus.

Is there any particular point to this? Not really–it’s just one of those facts that intrigue us and a host of aviation geeks.

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