Capt. Lee Moak, president of the Air Line Pilots Association, said in a recent blog posting that Boeing is a national asset that plays a critical role in the health of the economy, in defense, and in maintaining U.S. jobs. We appreciate the recognition, but Moak’s proposed “reforms” for the U.S. Export-Import Bank would only undermine the competitiveness of Boeing and the size and health of its huge U.S. supply chain.

The proposal Moak is pushing on Capitol Hill would prohibit Ex-Im from providing loan guarantees to many of the world’s airlines, notably some of the most successful, fastest growing airlines. It thus would put Boeing and the 15,600 U.S. companies that help build our products at a significant disadvantage against Airbus, which would continue to have the support of three government export credit agencies (in France, Germany and the UK). 

Given that last fact, Moak’s proposal doesn’t even make sense. If government export credit truly was a competitive issue for U.S. airlines – and we don’t agree that it is – then pulling the plug on Ex-Im would not solve his alleged concern. It would simply drive the foreign airlines that need a government loan guarantee to buy airplanes made in Europe rather than here in the United States.

In reality, government export credit guarantees do not convey a competitive advantage to foreign airlines because the guarantees have gotten very expensive. In 2011 the member nations of the Organization for Economic Cooperation and Development (OECD) agreed to double the rates they charge for government guarantees. The goal was to bring the “all-in” cost of financing for airlines accessing government credit in line with commercial loans. All of the data since then indicates the agreement has achieved that goal and then some. In many instances foreign airlines are now paying even more for government-backed loans than carriers are getting in commercial markets without such guarantees. U.S. airlines, in fact, are getting far cheaper financing in the U.S. bond market than foreign airlines are getting using Ex-Im.

Foreign airlines pay to secure government loan guarantees for various reasons. Carriers in developing regions often need such guarantees to secure any kind of commercial loan. Other carriers need the guarantees because they are growing fast and need to diversify their borrowing beyond their traditional sources of capital. In all cases Ex-Im and other export credit agencies are filling gaps in commercial lending.

Moak alleges that foreign airlines using Ex-Im are saving $20 million per aircraft in finance costs. There is no credible data to back up that claim. Nor is there any data to back-up his claim that Ex-Im is creating excess capacity in the global air transportation system.  Every bit of data found in independent analysis of this issue – and we look at everything – indicates that government export credit confers no competitive advantage and that foreign airline fleet expansions are supported by strong passenger growth, especially in Asia. There simply is no evidence of a capacity bubble.

Boeing is confident the airlines for which Moak’s pilots fly can and do compete successfully with the world’s airlines. Many of their foreign airline competitors, in fact, feel that it is the U.S. airlines that have a competitive advantage, given their size, their alliances, their buying power, and the fact that they operate out of a protected domestic market that is still the world’s single largest air travel market. The U.S. airlines may have some disadvantages too, like high taxes, onerous regulations, and poor infrastructure that includes an out-of-date air traffic control system. But none of those are issues that have anything to do with the Export-Import Bank.

Congress needs to reauthorize Ex-Im in support of U.S. exports – all U.S. exports, including the nation’s number one export, commercial airplanes. As Moak pointed out, aerospace is an industry that is vitally important to the U.S. economy, defense, and jobs. 

Keating is senior vice president, Government Operations, at The Boeing Company.