Global Airlines

The most notorious airlines for receiving government subsidies are Etihad, Emirates and Qatar airlines, all of which are owned by the governments of Emirates and Qatar, respectively. The subsidies are received by the airlines from their government as a loan at a heavily reduced interest rate or non existent interest rates so that the airlines can buy aircraft from aircraft manufacturers and still be able to keep the commodity price low.

With regard to subsidies provided to US airlines by the US government, the air carriers do receive fuel and tax subsidies, such as Delta, American and United. While the subsidies do not portray themselves to be glamours at first like with foreign carriers who receive the money directly from their government for the purpose of being able to provide a commodity at an affordable rate, they still do affect the companies revenue. Companies such as Emirates and Etihad have made claims that they do not think the subsidies they receive from their respective countries is unfair because the US air carriers have also received the equivalent of these incentives. (CAPA) The legacy carriers seem to think that the incentives they receive are the same as what US air carriers receive, but this is simply not the case.

The United States has developed an export-import bank with the primary function of granting reduced rate loans to foreign countries with the intent of lending capital to those countries so that they may purchase U.S made tools or equipment to be payed back at a later time and stimulate the U.S economy (Bhaskara, V). The United States legacy carriers see a problem with this incentive to foreign carriers because not only can the U.S carriers not take advantage of this but the foreign countries airlines have more than enough financial backing so that they could sustain themselves and their airlines without help from our export import bank but they see the potential and take advantage of it by purchasing numerous U.S made aircraft from Boeing, etc. This would be a fair practice that would also stimulate our economy if it were available to the U.S air carriers, such as Delta, American, and United, but it simply is not.

To a certain degree this whole practice that these air carriers part take in is fair. The foreign carriers see the problem with the way that the system currently is set up and take advantage of it, while the U.S carriers who give most to the economy are not offered this huge incentive. I get the idea behind the import export bank and how it can stimulate an economy tremendously but there needs to be limits to the people who can use it and for what purposes. The foreign carriers all originating out of the middle east are owned by some of the wealthiest people in the world who do not necessarily need the huge benefit of using the U.S bank but elect to use it anyways to further improve their business like any smart business owner would do. This is a huge benefit that is only plausible due to a technicality in the verbiage of the law.

Bhaskara, V. (2014, September 2). The Fight Over the Export-Import Bank Has No Easy Answers.
     Retrieved October 22, 2015, from http://www.forbes.com/sites/airchive/2014/09/02/the-fight-over-the-export-import-bank-has-no-easy-answers/

CAPA. (2014, May 4). Chinese airlines overtake US carriers across the Pacific. The big dilemma: US-China open skies? Retrieved October 26, 2015, from http://centreforaviation.com/analysis/chinese-airlines-overtake-us-carriers-across-the-pacific-time-for-us-china-open-skies-222454