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Legislation to reauthorize the Export-Import Bank has split Republicans and stymied two party leaders trying to strike a deal. But it has also caused turbulence for the $57 million airline industry lobby — for which the bank is of utmost importance.
The bruising battle has revived a history of bad blood between rival air carriers and put a trade association led by Nick Calio, the former legislative director for President George W. Bush, in a sensitive position.
At issue are complaints from Delta Air Lines that the bank has helped Delta’s foreign competitors by offering cheap loans on the sale of Boeing-made airplanes. Boeing Co., which benefits greatly from Export-Import Bank deals, is the leading company backing the bank.
Delta CEO Richard Anderson told the U.S. Chamber of Commerce earlier this month that an Ex-Im loan provided Air India a significant financial advantage on interest costs for airplanes it purchased to compete with his company.
“Our focus is narrow, very narrow. We don’t object to that kind of financing for other manufacturers outside of airplanes. We don’t object to that financing on narrow-body airplanes,” Anderson said.
Calio’s group, Airlines for America, along with Delta, sued the Ex-Im Bank in November. But United Airlines, which has feuded with Delta in several past episodes, did not sign on to the lawsuit.
Then, in early March, Calio appeared to extend his fight against the Ex-Im Bank to Capitol Hill, telling Aviation Daily, “The U.S. government should not be subsidizing foreign airlines with Ex-Im credits” in a story that described A4A as being on the opposite side of the reauthorization fight from the Aerospace Industries Association, which strongly supports reauthorization.
But when asked about the reauthorization bill in early April, A4A spokesman Steve Lott professed his group’s neutrality, saying, “Airlines for America is not opposed to the Ex-Im Bank or its reauthorization and have not lobbied on the Hill this year. But we are engaged in our lawsuit, first filed last year.”
The group’s just-released lobbying disclosure form tells a different story, listing two reauthorization bills among the issues the group lobbied on in the first quarter of this year.
A4A said it was lobbying on those bills in the form because “we are frequently asked by Members and staff about reauthorization of the Ex-Im Bank,” Lott said, stressing the distinction between the group’s lawsuit and its lobbying efforts.
But two lobbyists familiar with the situation say United, which purchases many airplanes produced by Boeing, pressed A4A to back off in early March. United did not return a request for comment.
“Delta’s strategy has tainted A4A, too,” one of the lobbyists said.
House Minority Whip Steny Hoyer, who is in talks with Majority Leader Eric Cantor (R-Va.) on the reauthorization bill, said Tuesday that the two were “pretty close” but that issues pressed by Delta remained outstanding.
“I think there’s no doubt that Mr. Cantor is concerned about the issues that Delta has raised and he’s looking at those,” the Maryland Democrat said. “Delta raises issues that are worthy of concern. That is, from their perspective, they are being disadvantaged to foreign carriers by giving some subsidies to foreign carriers in terms of loan guarantees.”
A draft version of the bill from early March includes two sections that address loans used to purchase “large air carrier aircraft,” which are defined by the bill as airplanes that seat at least 31 passengers.
Under that draft bill, the Ex-Im Bank would be required to solicit and respond to public comment on any loans made to companies that intend to purchase these large air carrier aircraft.
The bill would also require the president to negotiate with foreign nations about “substantially” reducing export credit financing for large air carrier aircraft.
Hoyer said that though Cantor is concerned about the issues raised by Delta, the Virginia Republican is definitely interested in passing a bill reauthorizing the bank.
“My own view, my honest view, is that Mr. Cantor does in fact want to see this bill pass. And he’s been working with us to try to make sure that — I don’t think he can pass it on his own, obviously. I’m not sure he wants to pass it on his own. But I think he’s going to need help,” Hoyer said.
Hoyer said he had expected the bill to come to the floor this week but realized more work is still required.
“I presume that has something to do with his wanting to ensure his Members of his Conference that they have a comfort level with the bill that he’s agreed to,” Hoyer said of Cantor.
A request for comment from Cantor’s office was not returned.