Global Airlines

The domestic American airlines (including United and American) are currently lobbying the government for renegotiated international agreements which govern foreign airspace. This comes in response to reports that foreign airlines are receiving government subsidies while domestic American airlines are not. These agreements attempt to eliminate government interference and allow domestic American airlines to compete with foreign carriers without as many restrictions.

Emirates has already confirmed receiving government subsidies. The latest reports indicate the amount to be in the billions. Qatar has also received government subsidies. The latest reports indicate that the foreign carriers (including Emirates and Qatar) have received over 40 billion dollars in the last few years (Arnold 2015).

There are some reports that claim the domestic American airlines have received government subsidies as well. The latest report was 150 billion dollars over the last one hundred years. This report have do not account for what the money is spent on (around 140 million was spent on a trust fund that supported Federal Aviation Administration spending). American based airlines have even contributed money towards the fund. American based airlines contribute around 10 million annually to the fund (Reed 2015).

The foreign airlines have also taken advantage of below market interest rates. The United States Export Import Bank provides reduced interest rates to foreign purchases in an attempt to reduce credit risk to potential buyers. This has created a lot of controversy. Boeing was strongly lobbying Congress to have the United States Export Import Bank discontinued. Boeing manufactured jets are purchased by these foreign airlines at reduced interest rates.

I think this problem should be addressed. This provides an unfair advantage to foreign airlines. They have a better overall infrastructure due to massive government subsidies and are able to purchase large quantities at reduced interest rates (the American based airlines do not benefit from either of these).

Arnold M. (2015 June 23). American Air CEO says Government Should Address Subsidy Spat. Retrieved October 25 2015.

Reed T. (2015 April 14). U.S. Airlines have Paid the Government Billions. Retrieved October 25 2015.