ATA Writes Congress About the U.S. Government Subsidizing Rich Foreign Airlines

Commercial aviation helps drive more than 10M American jobs and 5 cents of every dollar of U.S. GDP
Commercial aviation drives more than $1 trillion per year in economic activity
In 2012, U.S. airlines moved more than 48,000 tons of cargo per day
In 2012, the value of a kilogram of U.S. merchandise exported by air averaged 121 times the value exported by sea
For every 100 airline jobs, some 360 are supported outside of the airline industry
Federal taxes constitute $61 – or 20% – of the price of a typical $300 domestic round-trip ticket
In 2011, U.S. airlines carried 16 percent more passengers and cargo using 10 percent less fuel than in 2000
Domestically, airlines drive 5% of economic activity but account for 2% of man-made GHG emissions
From 2000-2011, airlines reduced GHG emissions by 11% while transporting 16% more passengers and cargo
From 1975-2011, U.S. airlines and their partners reduced significant noise exposure by 99%
Commercial air travel is the safest form of intercity transportation in the United States
In the most recent decade, scheduled air service on U.S. airlines was seven times safer than in the 1970s
From 2000-2012, U.S. airlines improved the on-time arrival rate from 72.6% to 81.9%
From 2000-2012, U.S. airlines reduced the flight cancellation rate sharply from 3.30% to 1.29%
Airfares are a bargain: From 2000-2012, U.S. CPI rose 33% while average domestic fare rose just 14%
Adjusted for inflation, the average round-trip domestic airfare fell 15% from 2000
2007 domestic flight delays cost the United States approximately $31 billion
In 2012, the value of U.S. merchandise exported by air reached an all-time high of $427B
In 2012, U.S. exports of air-travel services reached an all-time high of $39.5B, driving a $5.1B trade surplus
In 2012, U.S. passenger and cargo airlines spent more than $50B on fuel, averaging 36% of operating expenses
In 2012, U.S. airlines posted the lowest annual rate of mishandled baggage ever recorded
FAA projects U.S. air travel demand to top 1 billion passengers in 2027
In 2012, US airlines flew 83.4 million passengers in scheduled international service - a record high
In 2012, the total value of merchandise exported from or imported to the United States by air exceeded $927 billion
In 2012, 7.15 teragrams of merchandise was exported from or imported to the United States by air

	ATA Writes Congress About the U.S. Government Subsidizing Rich Foreign Airlines
	PubZone1 October 19, 2010 The Honorable Senator or Representative The United States Congress Washington, DC Dear Senator or Representative: On September 16, I sent you a short note and article about a subject of great concern to U.S. airlines – the growing flood of official export credits being extended by governments in aircraft-manufacturing countries to support sales of aircraft to our airline competitors. These subsidies are provided by the U.S. Export-Import Bank in the United States, and export credit agencies in Europe, Canada and Brazil. We explained the market distortions adversely affecting U.S. airlines, and expressed our fear that current negotiations to achieve a new “Aircraft Sector Understanding” among these countries and others at the OECD will make an already bad situation worse. Subsequently, The Boeing Company circulated a letter to you and other Members of Congress that completely mischaracterizes our concerns and the position that we have urged the administration to take in the OECD negotiations. We wish to take this opportunity to set the record straight. We have no desire to harm Boeing, a fine company with which all of our members have a close business relationship. We do not think Boeing will be hurt if credit subsidies to healthy foreign airlines are curtailed. In the last few weeks, Boeing announced more than 100 new orders for large commercial aircraft. Boeing clearly does not need these subsidies to support its sales; neither do its foreign airline customers. Here are some key facts of which you should be aware: Ex-Im Bank-subsidized financing ($8.6 billion last year) is going to many foreign airlines that are financially strong competitors of U.S. airlines, have ample access to commercial financing and do not need below-market export financing. Beneficiaries include nine of the 10 most profitable airlines based outside of the United States and the Airbus home countries in Europe. Examples include Emirates Air, Singapore Airlines, WestJet in Canada, Korean Airlines, Qantas, and others. These airlines now operate more than 50 percent of the capacity on routes to and from the United States. These government subsidies provide our foreign competitors with hundreds of millions of dollars in benefits by enabling below-market financing. For example, in 2009, both Delta Airlines and Emirates Air secured financing for deliveries of three Boeing 777 models aircraft. Because of Ex-Im Bank support, however, Emirates secured a vastly superior interest rate from its lenders, and we estimate that Emirates realized an estimated $100 million more than Delta in loan proceeds. Export financing has been estimated by Airbus to equate to a 7 percent reduction in the cost of an aircraft, an estimate confirmed by the economic consulting firm LECG. The Boeing letter states that our claims are “without merit” and that we advocate that Ex-Im Bank should “dramatically curtail” its credit support for Boeing sales. Our position is fully stated in the attached letter, which we sent to Secretary Geithner, Ex-Im Bank President Hochberg and other senior administration officials on August 16. What that letter shows, and what we have consistently advocated to administration officials, is that U.S. airlines support the negotiation of a revised OECD agreement under which all participating countries mutually agree to step back from the subsidy war in which they are engaged. The current race to provide the most subsidies has no victor, but it counts U.S. airlines – and potentially taxpayers – among its victims. Surely it cannot be good policy to argue that Ex-Im Bank and its counterparts should maintain, even increase, their subsidies because they make money, even at the expense of other U.S. exporters. Boeing has been a leader in the fight to rid the aircraft sector of unfair, subsidized competition in the aircraft-manufacturing sector. We believe the same principled stand should be followed by Boeing when it comes to other subsidies that artificially create and support sales of aircraft. There is no difference in the nature of the distortion, though the adverse impact may fall on different U.S. companies and workers. We would welcome an opportunity to provide you with further facts and information about the position taken by U.S. airlines on this subject. James C. May Attachment: ATA CEO Jim May's August 16th Letter to Secretary Tim Geithner PubZone2	A4A advocates measures to support aviation safety, security and well-being.