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Why US arlines pay more for their jets

  • Thread starter Thread starter Dizel8
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I found this interesting:

ATLANTA (TheStreet) -- In 2009, Delta(DAL) financed three 777s it bought from Boeing(BA), paying interest at 8.11% over nine and a half years. That same year, Emirates Airline bought three similar aircraft, paying interest at 3.4% over 11.9 years.

http://www.thestreet.com/story/10857852/why-us-airlines-pay-more-to-finance-jets.html?obref=obinsite

Credit Risk? Just like buying a car, good credit you pay low rates, not so good you pay high rates.
 
No actually they were talking about financing through the US export bank, according to that article at least.
 
Time to open a commercial aircraft lease company in a developing nation. It appears there's a a bit a margin that could be made buying Boeing aircraft overseas (not in the EU) and leasing them back to US and EU airlines.
 
Maybe it has something to do with the fact that Emirates is the largest 777 and A380 operator in the world. They currently operate over 80 777's and will have a fleet of roughly 130 once they all arrive. When you buy in bulk you generally get a discount.
 
Nope, the issue is that the US Government is subsidizing foreign sales to support Boeing (US Exports). The unintended consequence is that the subsidy results in an uncompetitive playing field for US Airlines that operate globally.

Analysts are making a good point that if the US Export bank is subsidizing Emirates (who's growth makes them both a threat to other international carriers and a bad credit risk) then that subsidy ought to be available to US carriers too.

Of course, the end result may be that US Airlines prefer Airbus jets since they are subsidized by the participating EU members.

Another data point is that US based airlines are starting to complain about the costs of fleet replacement (IMHO they can not afford to replace MD80's, 737's and 757's as they wear out).
 
Nope, the issue is that the US Government is subsidizing foreign sales to support Boeing (US Exports). The unintended consequence is that the subsidy results in an uncompetitive playing field for US Airlines that operate globally.

Analysts are making a good point that if the US Export bank is subsidizing Emirates (who's growth makes them both a threat to other international carriers and a bad credit risk) then that subsidy ought to be available to US carriers too.

Of course, the end result may be that US Airlines prefer Airbus jets since they are subsidized by the participating EU members.

Another data point is that US based airlines are starting to complain about the costs of fleet replacement (IMHO they can not afford to replace MD80's, 737's and 757's as they wear out).

Fiction....What in the world would be the motivation for a US financier, giving a sweatheart deal to Emirates????? It comes down to a myriad factors....Some but not all: Credit risk, amount of aircraft financed, trying to get Emirates to buy boeing as opposed to airbus and etc....

Why do the right wing wacks always look for the scapegoat. Right now it's imigrants and the fact that we have a "Muslim president" . We sure got some fools in this country.
 
cheaper financing would still not solve the problems of the US airline industry. ever experienced the product emirates puts out compared to the US carriers
 
Fiction....What in the world would be the motivation for a US financier, giving a sweatheart deal to Emirates????? It comes down to a myriad factors....Some but not all: Credit risk, amount of aircraft financed, trying to get Emirates to buy boeing as opposed to airbus and etc....

Why do the right wing wacks always look for the scapegoat. Right now it's imigrants and the fact that we have a "Muslim president" . We sure got some fools in this country.

You really should read the article before commenting further.
 
Just read it.....Cathay Pacific vs. UAL is a no brainer.....I'd give Cathay 4 percent and UAUA about 12 percent. Cathay has route monopolies and Massive profits and massive equity in their business.
 
Of course, the end result may be that US Airlines prefer Airbus jets since they are subsidized by the participating EU members.
I'm not really sure I understand your arguement. Plus, this has been in the news, too (Airbus vs Boeing, Part 8352):

From FlightInternational:

Airbus bemoans delay to WTO ruling on Boeing subsidies

Notification of a delay to a World Trade Organisation ruling on subsidies to Boeing has drawn complaint from Airbus on the same day that corporate partner EADS North America submitted an 8,000-page proposal for the US Air Force tanker contract.

Chief executive Tom Enders says he is "surprised and disappointed by the last minute announcement", which postpones the ruling by two months, to mid-September. Nonetheless, he is claiming a vindication of Airbus's argument that "the complexity, inter-connectedness and industrial significance of the Boeing and Airbus cases would strain the capabilities of the WTO".

Last week, the WTO issued its final report on subsidies to Airbus. It ruled that a series of loans to the European airframer over the years - including reimbursable launch aid for the A380 and other infrastructure grants - broke international trade rules, but did not establish that the funding caused "injury" to the US aerospace industry.

Boeing's supporters in the US Congress have seized on the WTO ruling against Airbus to call on the Department of Defense to account for any perceived cost advantages in the EADS bid for the KC-X contract.
The USA initiated the case on Airbus subsidies in 2004, following its withdrawal from a bilateral agreement on trade in large civil aircraft. Europe then filed a counter case, claiming that US federal research and technology grants and funds from individual states represented illegal subsidies.

"Since these cases were filed, the world has changed," argues Enders. "In aviation, the previous duopoly marketplace is increasingly being populated by government-sponsored players, leaving Boeing and Airbus as those that, by any objective measure, benefit least from government support."
He expects the panel investigating Boeing funding to find that the airframer has "received billions of dollars in WTO illegal subsidies" and to uphold his assertion that the Boeing 787 "would not exist without government subsidies".

That view is echoed by Airbus North America chairman Allan McArtor, who describes Boeing's newest type as "the most highly subsidised aircraft in aircraft history."

On the delay to the WTO ruling, McArtor comments, "I think it smells like last week's fish," but adds: "I'm not saying WTO is at fault. The process somehow has gotten off track from where it was supposed to be."
Airbus has repeatedly asserted that the conflict can only be resolved through transatlantic negotiations.

"When the two WTO reports are published, those nations whose industries are building the aviation technologies of tomorrow can consider the WTO's views on the past to craft new market rules that efficiently guarantee fair trade, a level playing field and continuous technology investment," says Enders.
 

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