Delta is a great American company, but on the issue of aircraft financing it is wrong.
The Coalition for Employment through Exports, composed of exporters, banks and trade associations, champions the work of the Export-Import Bank of the U.S. (Ex-Im) because it levels the playing field for U.S. exporters across all industries, including aircraft manufacturing.
Ex-Im provides financing to foreign buyers of American made products where private sector loans aren’t readily available, affordable or competitive.
Ex-Im supports American businesses competing against foreign-manufactured products that have foreign government backing. And it supports American jobs — 290,000 last year alone.
Ex-Im does not offer subsidies or tax breaks. It charges interest and fees to customers — earning $5 billion for U.S. taxpayers since 1992.
Delta wants you to believe it could compete better globally if Ex-Im stopped supporting foreign purchases of Boeing aircraft. But eliminating Ex-Im financing for sales of American-built planes wouldn’t benefit Delta or its workers. Instead it would lead to more foreign airlines buying more planes from Boeing’s major competitor, Airbus, a European consortium.
Delta says it wants a fair fight against a competitor, Air India, for the purchase of its fleet. But Delta is not telling you the whole story.
First, Delta has a noninvestment grade credit rating, compared to Air India, which is backed by an investment grade guarantee from its government. Its financing terms will never be comparable.
Second, Delta knows that commercial aircraft financing terms are competitive with government export credit as a result of U.S. negotiations with other countries; a recent United Continental bond financing for new Boeing 787 airplanes demonstrates this fact.
Third, Delta claims that Ex-Im financing that supported Boeing’s aircraft sale to Air India resulted in job losses for the airline, but has provided no credible evidence. Delta publicly attributed the cancellation of its direct flight to Mumbai to the “worldwide economic downturn.”
Delta denies any domestic job benefit from this sale, but more than 9,000 Americans will manufacture the first dozen planes in Air India’s order.
Delta’s criticism of Ex-Im is particularly suspect given that it is the beneficiary of about $4 billion in export credit financing to purchase airplanes from Canada’s Bombardier and Brazil’s Embraer. Ex-Im also recently approved an $84.8 million loan guarantee for the purchase of engine maintenance services from Delta TechOps employees working here in Atlanta.
Ex-Im makes U.S. companies — in the aircraft industry and others — more globally competitive. It supports jobs across America. And Delta knows it.
John Hardy is president of the Coalition for Employment through Exports.
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