The U.S. Congress moved closer to voting on “stopgap” funding legislation that includes a controversial provision to temporarily extend the charter of the Export-Import Bank, which helps finance exports of American-made products, including airplanes and helicopters.
Export-Import Bank of the United States
The U.S. airline industry is in “survival mode” against competition from foreign carriers, some of which are using “extreme new measures” to gain access to Americans flying internationally, said the president of the Air Line Pilots Association (ALPA). Lee Moak sounded the alarm during a May 29 press briefing that touched on the union’s hot-button issues, chief among them Norwegian Air’s application to the U.S. Department of Transportation (DOT) for a foreign air carrier permit.
The U.S. Export-Import Bank (Ex-Im) announced a new goal today, pledging $2 billion in financing for U.S.-manufactured business airplanes and helicopters by year-end. It reached a previously announced goal of $1 billion in financing for these exports in December, 10 months ahead of schedule.
The U.S. Export-Import Bank recently topped $1 billion in support of American-made business airplane and helicopter financings since the beginning of Fiscal Year 2012. In a deal that drove it past this milestone, the bank approved a guarantee of a $300 million loan extended by Apple Bank for Savings to Minsheng Financial Leasing Co. of Tianjin, China, to finance the purchase of eight business jets from Gulfstream Aerospace. At EBACE 2012, the Ex-Im Bank announced it would provide support for at least $1 billion in business airplane and helicopter financings by the end of 2014.
The Air Line Pilots Association sent a letter Tuesday to Senate Banking Committee chairman Tim Johnson (D-S.D.) and ranking member Mike Crapo (R-Idaho) urging the committee to impose tighter oversight on the Export-Import Bank of the United States and Congress to work toward eliminating financing for widebody aircraft to foreign carriers.
Boeing’s recent assertion that the appetite of capital markets to fund airliner orders has increased comes as especially welcome news to manufacturers and their customers at a time when other sources of funding seem under pressure. Export credit, in particular, now comes generally at higher interest rates and with tougher equity requirements. At the same time, such government-backed capital has become a hostage to global politics, according to Kostya Zolotusky, managing director for capital markets development and leasing at Boeing Capital.
The U.S. Senate approved legislation yesterday to reauthorize the Export-Import Bank, bringing to conclusion a dispute in Congress driven by the airline industry’s opposition to export financing of Boeing long-range aircraft purchased by competing foreign carriers. The Export-Import Act of 2012 (H.R.2072) was approved a week earlier by the House and is expected to be signed by President Obama. The bill extends the bank’s charter through 2014 and increases its lending authority by $40 billion, to $140 billion.
The U.S. Senate passed a bill yesterday to extend the charter of the U.S. Ex-Im Bank for another three years and raise its debt ceiling from $100 billion to $140 billion, at least temporarily issuing a reprieve to Boeing and other U.S. aerospace companies that depend on government-backed loan guarantees to sell their products to foreign customers unable to access pri
In at least a symbolic gesture to Delta Air Lines and the Air Line Pilots Association, a bill passed on May 9 by the U.S. House of Representatives to extend the charter of the country’s Ex-Im Bank calls for the U.S. Treasury Department to negotiate with other governments toward eliminating state-backed loan guarantees for exports, including widebody aircraft sales.
GAMA hailed a bipartisan agreement reached on Friday between Republican House Majority Leader Eric Cantor and Democratic House Minority Whip Steny Hoyer to end an impasse over the reauthorization of the Export-Import (Ex-Im) Bank.
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