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Is this whole thing is really down -- Atlanta right now -- her senior vice president General Counsel for Delta Airlines is with us.
What a pleasure to have you with us -- I -- you for taking the time.
This export import bank though it seems to be affecting the airline industry as well -- -- it.
Well -- is.
About half of the export import bank's financing activities.
Go to financing.
Large aircraft by our competitors.
They bring those aircraft on the -- that.
Link foreign points in the US.
And they compete with us sent -- much lower capital cost and we have.
Why is that why are we helping our own because what you're saying is they sort of get a subsidy these aren't airlines -- -- -- cheaper.
Well that they're theory is that the bank is -- to.
Assist foreign customers to purchase.
And countries where there aren't adequate capital markets.
What's happened is that over time the bank has expanded its footprint.
And it's gone from financing.
You know acquisition.
-- of goods in countries like.
You know we're -- for example -- in the Soviet Union which was the original idea.
Two on the one hand.
Helping very -- airlines like emirates airlines.
Which is owned by.
The sovereign government and police to -- aircraft they don't need any help but they get it.
And on the other hand at the other end of the spectrum there are companies like here India.
Which have fallen flawed business plan sort of over expanded that have are very heavily and that probably can't get financing in the public markets -- in the private markets.
And -- -- them to acquire aircraft to compete -- Low cost levels so from a capital standpoint with US carriers like delta.
And I can give you a good example.
Of the effects of that on delta and its employees.
Delta began nonstop service between.
New York in Mumbai takes long range your trip to do that we we purchase.
Long range Boeing's -- seven aircraft to fly that -- We -- -- in the root for about three months when here India entered the -- Using long range Boeing aircraft that were financed for -- by the US government.
-- cost of five million dollars per year or less per aircraft and hours.
They then headed capacity wasn't needed in the market.
And over a period of eighteen months the average -- fell from about 12100 dollars to about 800 dollars.
Which was below levels that delta could sustain and we had to pull out of route.
Wow and that's there's not many jobs -- doesn't it people lose their jobs -- stuff like that happens.
It means series jobs that we've had economists look at the effect.
We have one estimate.
That ex -- bank finance thing for foreign aircraft purchases cost about 7500 jobs a year.
In the aircraft industry.
RR pilots union the airline pilots association.
On this standing arm in arm with -- us and we're trying to get the congress.
To get the XM bank to follow its own statutory mandate they have an obligation under -- by statute.
To balance the effects.
Of the exports they finance.
On the on the continent companies in the US that are affected I mean every export that goes into.
The world market is very likely to come back and and compete.
In some form with US firms so the statute that the bank operates under.
Requires them to balance the adverse effects on US employment and and industry.
But the bank has not been doing that in the case of her preference they just don't look at those effects at all and so we're asking congress.
And we think it's pretty modest request.
To make it very clear that my must do that on a case by case basis and and also to open up their process because they operate in secrecy.
They don't provide any details of the -- they propose to undertake.
They don't do them in public they do them in and closed sessions and the only find out about them when the the credit markets if they do publish that he.
You know like I said the Wall Street Journal ran a great story on the on the out -- page about this export subsidy boomerang I think it was called.
Which instincts in the coral right exactly was -- -- -- which -- seems to me is that.
Commerce including the tea parties.
Ignore this thing.
Nobody is says a word or not it may just continue to allow it to be funded.
Why is that why is this like this little untouchable thing I as part of the administration right now.
Paul -- two reasons one is that the bank has operated in secrecy for many years and people have not.
Focused on what it what it does and does some very beneficial things.
But no one has really focused until now on its on the adverse effects that.
That that there are unintended they're -- over consequences but they do occur.
Second thing is that that it's part of the the issue it's -- -- links to the issue of jobs and and -- you know on its face the bank would seem to be.
And creator of employment.
Problem is that it has adverse -- and they keep those adverse effects affect jobs and they today in our case cost jobs.
So there needs to be -- balance.
The -- in what we have I suppose it talk a little bit about the oil industry as well I guess -- The airline stocks consistently have a tough time they become unfortunately a place -- the day traders hang out.
You know over the last six months years stock's up about 16% which actually -- pretty impressive considering.
That the day traders are in Mary.
EM -- -- -- What we don't -- oil where it is.
This export import bank doing what it's doing it's it's almost like not the kind of stacked against you guys.
-- the -- have been -- against the airlines for a long time I think.
It -- and number of respects and this is one of them the industry has been affected by unintended consequences of governmental measures designed to help other areas of the economy.
We've done a lot of delta to improve our business model.
I think we're very very healthy business right now.
But we're concerned about the future -- internationally.
Let me give you an example.
The foreign airlines have about 11100.
Wide body aircraft on order for delivery between now and when he fifteen.
Eleven -- any aircraft -- 11100.
Over 11100 -- they funded by the export import bank.
Some of them are funded by the -- -- out of about a third of the aircraft the Boeing -- are funded by the export import -- US airlines have only 55 wide body aircraft were.
But during that -- more are you live vs 11100 why is that we're looking.
We're looking at in part it's because.
Subsidies that are provided by both both the export import bank here in the export credit agencies that that fund.
Airbus in Europe.
So between the two leaders a very significant cost and son of require these aircraft.
And we think that it's leading adult we think are concerned that it may be leading to a bubble.
Aviation that will first at some point in the near future.
And cause the kind of -- same kind of consequences.
In that market that you've had in the housing market.
It's in everybody's interest to find a way to limit these subsidies.
OK and and so I had I know we I have to -- you go but right now.
What do you do in -- -- Six this.
Well we're talking to congress clearly -- we have.
We've asked congress to two from our perspective as as they consider re authorizing the bank.
Increase the transparency.
And eliminate the secrecy that surrounds -- considerations of financings.
To ask the the US government to.
With the export credit agencies in Europe that fund Airbus so there can be some mutual disarmament and effect.
And also require the banks -- federal lawyer to follow its mandate.
And give consideration to the adverse effects of its -- -- on a case by case basis on the employment and I and well being of US general.
I have -- since you've been because it's totally unfair then our senior vice president General Counsel Delta Airlines thank you for sharing your story -- it's good stuff.
Are what we gotta get this story out -- markets I think it's this whole export import bank thing is -- Holy I mean you -- -- -- it was a waste of taxpayer money this is --
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