Airlines may be hit by new export credit rules: Report

Airlines around the world could face sharp rises in the cost of buying aircraft if new export financing rules to be discussed by government officials in Paris are approved this week, the Financial Times said on Wednesday.

Citing confidential documents prepared for the meeting, the newspaper said airlines that have used export credit agency (ECA) loan guarantees to help finance some of their planes will encounter higher upfront fees.

US and European airlines launched a campaign in October to change rules that allow foreign airlines to get credits when they buy Airbus and Boeing Co airliners, a facility denied to carriers in countries where the planes are produced.

That means an airline in an Airbus home nation, such as Air France-KLM, would not qualify for US credits when buying a Boeing in the same way a US airline buying an Airbus would not secure European export credits, the Association of European Airlines said earlier this year. 

The FT said if the rules were in place today, airlines with strong credit profiles, such as Emirates Airline and Ryanair Holdings Plc, would have to pay nearly 8% of the value of the debt raised to buy a plane, or about twice the current charge.      

The role of export credit financing increased sharply after private financing dried up during the financial crisis, pushing the contribution of ECA financing as high as one third of the value of aircraft sales, according to Airbus.