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TheStreet) -- Once again, let's review the lingering puzzle of why
Boeing(BA - Get Report) gets a private bank to finance aircraft purchases by wealthy foreign airlines to the detriment of U.S. airlines, and why that bank won't follow the rules Congress and the courts have made for it.
The Export-Import Bank of the United States is our country's official export credit agency. Its mission is to assist in financing the export of U.S. goods and services to international markets. Last week,
Delta(DAL - Get Report),
Hawaiian(HA) and the Air Line Pilots Association filed suit against the bank in U.S. District Court in Washington, D.C., alleging that it didn't follow the law in assessing whether to provide low-cost financing to five airlines seeking to acquire Boeing aircraft over the past 10 months.
Financing Boeing aircraft accounts for an exceedingly large chunk of the Ex-Im Bank's business. In fiscal 2012, its total exposure to outstanding financial commitments was $107 billion, of which 45% was for air transportation loans and loan guarantees, according to the lawsuit. All or nearly all of that involved helping customers at Boeing. From fiscal 2001 to fiscal 2012, the bank approved more than $67 billion in loan guarantees to foreign carriers and international aircraft lessors, enabling foreign airlines to acquire more than 950 aircraft at below market rates, according to the lawsuit.
Of course, underwriting loans to airlines from poor countries, if those airlines are unable to obtain reasonable financing on their own, makes sense because efficient air service is a key component in assuring a country's financial viability. As the world's leading power, the U.S. has long assumed a responsibility to assist poorer countries in building their economies.
But the Ex-Im Bank's airline clients over the past 10 months are hardly poor. Rather, the list includes
Emirates Airlines and
Etihad Airways, which are owned by the wealthy governments of Abu Dhabi and Dubai;
LATAM Airlines Group, operator of the largest airlines in Chile and several other South American countries;
LOT Polish Airlines and
Korean Air Lines. None of them are from economically disadvantaged third-world countries. In fact, all of them get more backing from their country's governments than U.S. airlines do.