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Why Delta Pays More Than Emirates for Boeing Planes

Even before the latest round of guarantees, the same five airlines had secured more than $13.5 billion in loan guarantees over the past 15 years, the suit contends.

The lawsuit filed questions why the bank failed to honor requirements included in the Export-Import Bank Reauthorization Act of 2012, which Congress approved in May. Reflecting concerns Delta raised in earlier lobbying and a previous suit, the reauthorization act requires the bank to "develop and make publicly available methodological guidelines (for use) in conducting economic impact analyses or similar studies," of the impact of its decisions on U.S. jobs, to respond to comments and to publicly report whether its financing actions enable competition with U.S. industries.

Since the act's approval, Emirates, Etihad, Korean, LATAM and LOT have secured loan guarantees. But for each transaction, the bank "performed no meaningful economic analysis," the suit said. Rather, the bank decided that "economic impact considerations were deemed inapplicable." Additionally, comments by Delta and ALPA were not considered, the lawsuit said, adding "The bank's approval of these guarantees for widebody aircraft, without any consideration of the plaintiffs' comments and the adverse effects on U.S. industry and employment that the guarantees will have, violates the bank's charter, the Export-Import Bank Act of 1945 as amended by the reauthorization act and the administrative procedure act."

Boeing is a pillar of the U.S. economy. It is the largest U.S. exporter. It directly employs 165,000 people in the U.S. and supports an estimated 1.4 million jobs through its U.S. supply chain. It spent more than $42 billion last year with 17,000 U.S. suppliers. It makes valuable products for which there is worldwide demand. Not only that, it operates one of the best lobbying efforts in Washington, with its commercial aircraft side supplemented by a defense business where lobbying is everything.

Given all that, does Boeing really need to have the ability to disadvantage U.S. airlines when it sells airplanes?

Here the point is often made that European banks do the same thing for Airbus customers. In other words, the other guy does it, so we have to do it too! It is probably worth noting that U.S. airlines are not eligible for government-backed financing when it comes to buying Airbus jets. Thus, the entire world can hold hands and join together in discriminating against U.S. airlines.
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