Gregory Polek has spent his entire career in aviation journalism with AIN, starting as a proofreader and assistant to then-managing editor Mary Mahoney in 1995 after serving an internship with&nbsp;New Jersey Monthly&nbsp;magazine and completing his B.A. degree in English/Writing at New Jersey’s William Paterson College. By 1997 Polek accepted a position as an associate editor, covering the regional airline beat for&nbsp;Aviation International News&nbsp;in place of retiring industry veteran Don Anderson. The assignment took Polek across North America and Europe to profile regional airlines varying in size and mission from the likes of floatplane operators Kenmore Air and Chalk’s Ocean Airways to regional jet operators such as SkyWest and American Eagle. Today, in his dual role as Air Transport Editor and International Airshow Editor, Polek writes, edits, and manages AIN’s commercial aviation content while overseeing each of the company’s daily international air show publications in Paris, Farnborough, Singapore, and Dubai. Most recently Polek has assumed oversight of daily coverage of the Helicopter Association International’s annual Heli-Expo convention.

Senior Editor

Gregory Polek

A group of 24 airlines from the U.S. and Europe have allied to oppose export credit agency loan guarantees to foreign customers buying Boeing and Airbus airplanes. On its face, their argument seems logical: no longer do many of the airlines and lessors who get export credit agency support need government-backed loans. But to undo the status quo would take a mighty effort on the part of governments that haven’t shown an inclination to slaughter what to the world’s two major airframe makers has become a sacred cow. 
The alliance, which includes Air France, EasyJet, Lufthansa, Virgin Atlantic, American Airlines, Delta Air Lines, United Airlines, JetBlue and Southwest Airlines, sent a letter to their respective governments qualifying their joint position on a matter that pits the manufacturers against their own customers in many cases. The alliance of airlines argues that export-credit-agency-backed loans to carriers that readily qualify for commercial credit without the help of government support creates an uneven playing field in an increasingly global competitive arena.
The Air Transport Association argues that foreign airline beneficiaries of U.S. Ex-Im Bank and UK Export Credits Guarantee Department subsidies include nine of the 10 most profitable carriers outside the U.S., the UK, France and Germany. The list includes Korean Airlines, Qantas, Singapore Airlines, Turkish Airlines, LAN, Emirates Airline, Air New Zealand, COPA, Air Canada, WestJet, Cathay Pacific and Japan Airlines, all of which compete with U.S. airlines for U.S. passenger traffic.
Export credit agency backing started during the 1980s as a means to support sales by Boeing and Airbus to airlines in countries where political risk rendered commercial bank loans unavailable. Over time, the use of export credit has widened, but the so-called Home Country Rule remains in place. It is a verbal understanding between the U.S. Ex-Im Bank and the export credit agencies of the UK, France and Germany that prevents the support of purchases of Airbus and Boeing aircraft by companies based in any of the five countries involved in the manufacture of large commercial aircraft, including Spain. 
Of course, ECAs support thousands of jobs at Airbus and Boeing. But the ATA, for one, argues that the support comes at the expense of jobs at the airlines. Furthermore, it argues, it has created a glut of global seating capacity. The ATA estimates that U.S. and European export credits have resulted in the subsidized carriers acquiring at least 11 percent more capacity than they otherwise would have added. 
Over the past decade, Ex-Im Bank guarantees backed $45.7 billion in financing for more than 800 large civil aircraft. In fiscal year 2009 alone, Ex-Im Bank supported the sale of 143 aircraft worth $8.6 billion to 17 foreign airlines and five leasing companies. Credit supplied by the ECAs of the UK, France and Germany roughly matched that of Ex-Im Bank, according to the ATA.
Indeed, the practice has become more pervasive as the airlines that benefit compete ever more directly with those who can’t—the so-called Home Country airlines. The alliance of 24 Home Country airlines this month called for a 20-percent cap on aircraft deliveries financed with ECA-backed loans, higher export credit premiums and fees to neutralize any interest rate advantage they yield, lower maximum loan-to-value ratios and restrictions on ECA-backed loans to airlines or lessors based in high-risk countries. 
The alliance shouldn’t expect its “statement of common principles” to elicit a warm reception from Boeing and Airbus, which during the industry downturn depended heavily on ECA support to maintain delivery rates. Today, according to the ATA, ECAs support some 35 percent of Boeing’s and Airbus’s sales, compared with 20 percent before 2008. 
A friendlier reception from the governments involved might seem just as unlikely, unless the alliance can convince legislators that the negative consequences of their support for aircraft manufacturers outweigh its political benefits.

Airline Alliance Tries To Reverse Export Credit Trend

A group of 24 airlines from the U.S.

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