Airlines seek curb on export subsidies

A group of leading airlines are calling on their governments to curb export subsidies that let rivals gain cheaper aircraft financing.

A group of leading airlines are calling on their governments to curb export subsidies that let rivals gain cheaper aircraft financing.


The 24 carriers, including British Airways and Virgin Atlantic, want premiums and fees set so that government export credits are not cheaper than bank financing.


They are also calling for limits on the number of aircraft eligible for subsidies to 20% of all deliveries.


The airlines from the US, UK, Germany, Spain and France say competitors such as Air India and Korean Airlines get access to lower cost funding for aircraft due to export subsidies. This gives them an advantage in buying from Boeing and Airbus.


The president of the US-based Air Transport Association James May called for a “level playing field” for all airlines.


“There should be fair access, sensible pricing,” he reportedly said in a letter to US treasury secretary Timothy Geithner.


The letter included a “statement of common principles” backed by 15 US airlines and nine European carriers.


The European airlines will also share the principles with their governments.


Other carriers backing the principles include Air France, Lufthansa and Southwest Airlines.