A large issue in regards to export/import banks is related to aviation. Boeing is one of the biggest advocates for this, and stating that "for 2012, Boeing Capital estimates that commercial aircraft financing will exceed $100 billion This shows that there is a return to US companies like Boeing. Manufacturing companies clearly are going to benefit by the ability to move more of their aircraft at lower interest rates of foreign carriers and, in that sense, Ex Im is a good program.
On the other side of the coin, however, is the long term effect. This is what worries me, personally. Because of the lower interest rates the foreign companies potentially may have the ability to charge far lower fares in the future. Currently, the location of most of hone foreign companies may not be much of a finical threat to the US companies but if over the course of time those foreign companies take the money they are save it relocate and start to provide the US with a lot of domestic flight services within the US the US companies may not be able to keep up. This could cause some US carriers to go under in the future. I also wonder how the cultural or potential regulatory differences would effect the safety around aviation should foreign carriers become the leading form of US domestic travel. Currently, the US is the leader in Commercial Aviation. While that is not a in jeopardy currently, I can't help but wonder what is to some.
Safety is definitely a consideration as foreign carriers continue to expand their routes to the United States. I think maybe a good idea would be to have a safety rating right beside the fare cost whenever travelers are purchasing a ticket!
ReplyDeleteCurrently there are laws in place that forbid foreign carriers from offering domestic flights in the US. If the laws were to change it would also open up foreign domestic routes to US carriers. With only 3 legacy carriers remaining after the American/US merger, competition is low and overcrowding is common. I think changing the laws would benefit passengers resulting in lower fares and better service through competition. Our economy is based on supply and demand, using competition to equalize prices and force better services, I think it would be a good thing overall. I don't see a result where Americans lose jobs; it would make more financial sense for Foreign carriers to hire Americans instead of paying for work visas, passports, and training for foreign employees.
ReplyDeleteThat's pretty interesting - about Boeing's estimate about commercial aviation exceeding 100 million dollars in financing aircraft. In this aspect, the Ex-Im bank really does seem like a good idea; If nothing else, for Boeing (as our countries largest manufacturer of aircraft). It is widely believed that this program will come back to bite us (as taxpayers and aviation workers) in the long-run. Because other countries may default on their loan payments: that money needs to be paid back somehow, and it will fall on all of us to handle it - if it continues to have a lack of regulation and oversight.
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