Boeing and its US domestic airline customers have opened a war of words over claims by US airlines that they are being disadvantaged by US government loan guarantees - through the US Export-Import Bank - that give their international rivals what they deem to be unfair subsidies to buy Boeing aircraft.
The airlines contend that giving foreign rivals access to cheap financing puts them at a cost disadvantage and floods the world airline market with uneconomic capacity.
The argument is simmering against the backdrop of negotiations under way within the Organisation for Economic Cooperation and Development (OECD) to hammer out a new aircraft sector understanding agreement that covers terms and conditions for export credit agencies in Brazil, Canada, the European Union and the USA.
Carriers united under the banner of the Air Transport Association of America have outlined their concerns in letters to several members of the US Congress and Obama administration officials including Secretary of State Hillary Clinton, Treasury Secretary Timothy Geithner, Ex-Im Bank chairman Fred Hochberg and Commerce Secretary Gary Locke.
To illustrate its case, the ATA has flagged up 2009 financing packages covering three Boeing 777-200LRs acquired by Delta, at $250.5 million each, and three 777-300ERs taken by Emirates with Ex-Im financing, at $271.8 million each.
"Delta's interest rate was more than 4.5 points higher than the rate paid by Emirates," says ATA. "Emirates also obtained longer-term financing and was able to finance a higher percentage of the purchase price. Emirates' loan to value ratio was approximately 12 percentage points better than Delta, which allowed Emirates to finance over $100 million more than Delta."
Noting that the United Arab Emirates has the 17th largest per capita GDP in the world, ATA stresses that export credit agency support "should be available only to airlines in the poorest countries for which market financing is demonstrably foreclosed as a result of either political or credit risk".
Boeing dismisses the ATA's claims as "without merit", and says curtailing financing would jeopardise US aerospace competitiveness as governments in Brazil, Canada and several European countries are considering ramping up access to export credit.
The airframer adds that in 2009, 2,381 small businesses provided it with products and services valued at roughly $1.5 billion.
Boeing also dismisses ATA's claim that export credit agency support has led to overcapacity in the marketplace. "We note that the International Air Transport Association just reported in its August monthly airlines financial monitor that published schedules suggest capacity growth will remain in line with demand."
But Delta chief executive Richard Anderson sees the impact of below-market-rate finance on airline industry capacity as far outweighing its benefit to US manufacturers: "I believe the airline business provides far more jobs and economic activity than the four principal aircraft manufacturers."