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01 August 2005
Home countries airlines, denied access to export credit for new aircraft, are now pushing for a regulatory review. Victoria Pennington reports.
Lufthansa gives a lot to Germany. It is not just the Eu133
million ($161 million) in taxes it paid in 2004; the fact that
it employees 90,000 people, or the 70% of its costs that are in
Germany. Lufthansa also acts as a flag carrier for the country.
Some 65% of its passengers are foreign and the airline
advertises abroad encouraging tourists to visit its home
country and also aiding business deals.
So why is the German government subsidizing foreign airlines
that compete with Lufthansa?
It is not just Germany. France, Spain and the UK all provide
cheap finance, through export credit guarantees, to foreign
carriers buying Airbus aircraft even though many compete with
their own airlines. The Export-Import Bank of the US does the
same for Boeing aircraft.
"It is particularly annoying to see your government support
profitable airlines that compete directly with you," says an
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