Sunday, March 25, 2012

Export-Import Bank

1) What is the Export-Import Bank?
According to EXIM Mission Statement the mission of the Export Import Bank is to assist in financing for export US goods to international markets. "Ex-Im Bank enables U.S. companies — large and small — to turn export opportunities into real sales that help to maintain and create U.S. jobs and contribute to a stronger national economy." 85% of their transactions go to benefit U.S. small businesses.

2) What is its relation to the aviation industry?

The relation that Export-Import Bank has with the aviation industry is terrible for US carriers and awesome for foreign carriers.  The whole point of the ExIm bank is to create jobs in the US by exporting materials/airplanes to foreign countries for cheaper loans.  According to senator DeMint Ex-Im costs U.S. airline industry up to 7,500 in job loss.  "Delta estimated that ExIm cost the U.S. airline industry up to 7,500 jobs and $684 million a year."  ExIm makes it so foreign carriers can buy newer and better aircraft cheaper than any U.S. competitors which is extremely ridiculous.


3) Why has it been in the news lately?
ExIm bank has recently been in the news lately due to the new purchase of aircraft of Air India.  Air India according to Business Standard is in "deep red" and without the help of ExIm there is no way they would purchase these 30 brand new Boeing Aircraft.  This is extremely bad news for competing US airlines such as Delta Airlines who is competing with Air India for certain Middle Eastern routes.  According to the Business Standard  "The Bank's support for foreign carriers puts ATA's operator members, including Delta, at a competitive disadvantage because, among other things, the Bank's foreign beneficiaries have access to cheaper capital to finance their aircraft purchases."

4) What is the ATA stance on this? What about Boeing? 

ATA stance on this Export Import bank issue is very strong.  On November 17th ATA sued the Export Import Bank of the United States seeking to halt the $3.4 billion in loan guarantees for aircraft financing for Air India according to Business Week.  ATA is obviously not happy that airlines like Air India who are getting these great loans for Boeing newest aircraft such as the 787, which is going to cost US Airlines a ton of money not to mention a loss of employees.   This statement for Business week really sums up the whole problem "“When ATA’s operator members purchase such aircraft, they must do so without the United States as a guarantor for their financing,” the association said in the lawsuit. “As a result, ATA’s operator members pay substantially more than the bank- backed foreign carriers pay to finance the same Boeing aircraft.”  Boeing on the other hand is on the other side of the street.  Boeing believes that if the there were no Export Import Bank that these new purchases by foreign air carriers would not be purchased. According to WCARN "Boeing said in a statement that the bank is "vital to helping level the playing field" globally." This is a very tough situation, where as Boeing is creating more jobs to build these new aircraft for foreign air carriers, U.S. carriers is throwing a fit because they are losing money, and not getting these beneficial loans such as Air India.  

Sunday, March 18, 2012

Corporate Aviation

The corporate aviation company I chose to discuss is one that is even though really big, it is a dream job that I would love to have one day and that is NetJets.  NetJets is a fractional aircraft ownership that was introduced to the NBAA (National Business Aviation Association) in 1986.  NetJets is open to anybody that is willing to pay the money necessary.


According to NetJets Fleet they offer the "largest, most diversified private aircraft fleet in the world."  They offer jets in 3 different categories, the light cabin which consist of six different aircraft, midsize cabin and large cabin.  All together NetJets offer 14 different types of aircraft from Cessna Citations to Hawkers to Gulfstream. With a fleet size of over 340 airplanes.  The largest aircraft they offer is the Gulfstream 550. 


The thing that I like the most about NetJets is they don't have a specific route they fly.  They will fly all over the world as long you purchase it.  The benefit of purchasing a fractional ownership from NetJets is one you get to fly on your own private aircraft but it also will save time compared to a regular commercial carrier.  An example of this is a route from Miami to Chicago on a airliner takes approximately 7.5 hours (which takes into account driving to the airport, security, waiting etc.) compared to 3.1 hours if you fly on a NetJets aircraft.


In order to even apply for a pilot position at NetJets they require a minimum of 2500 hours total time, 500 hours multi and 250 hours instrument time according to NetJets Qualifications.  Each aircraft requires different qualifications.  NetJets pilots salary range from a wide range.  For a first officer salary ranges from $56,875-107,768 and captain salary ranges from $87,500-187,260.  Salary for NetJets is just like the airlines ranging from type of aircraft and years of service.  NetJets is a dream job for most pilots due to the freedom of going to different places, meeting some interesting people, and having a very nice corporate aviation fleet.  

       

Sunday, March 11, 2012

FAA Reauthorization Bill

The new FAA Modernization and Reform Act of 2012 aka The FAA Reauthorization Bill which was released on February 14 2012 has set the stage for major improvements in the airline and cargo industry.  Although the bill is over 400 pages of material highlighted with important information, I will chose 3 of the main topics that I believe will have the largest impact on the industry.


The first one I will talk about is pry the most important and will have the most impact on the industry over time and that is the Next Generation Air Transport System aka NextGen.  NextGen according to the FAA is a way to update navigation using surveillance technology.  It will increase safety significantly and save airlines alot of money by " shaving minutes off flight times as we enhance the airspace around our busiest clusters of airports."  Which translates into shorter flights to help save fuel and help the environment.  In the new FAA Reauthorization Bill it pushes for a faster timeline to implement NextGen.  It will mandate precision navigational procedures at 35 US airports by 2015.  The Reauthorization Bill will implement the NextGen faster then originally thought.


The second point which I believe will be most beneficial for the industry is Runway Safety.  In the new bill the FAA pushes to develop and implement a plan to improve runway safety.  This new runway safety will scientifically reduce runway incursions within six months.  The new bill which is planned to be in place by June 30 2012 will alert pilots and controllers of potential runway incursions.  This is great news for everyone in the industry.  Runway incursions are a very dangerous situation that could lead to a incident or accident.  According to FAA Runway Safety there were 954 runway incursions in 2011.  With then new bill the new Runway Safety will improve runway safety and reduce the number of runway incursions.


The last point in the FAA Reauthorization Bill that I believe is a good implement is putting cockpit doors for all-cargo aircraft.  You may think whats the point of putting doors on planes when the only thing on the airplanes are the pilots and boxes, but with terrorism in the world increasing every day cargo airplanes are an easy target.  With cargo companies not having enough man power to check every single cargo on the airplane they just do a random check.  There have been rumors going around that the next target for terrorists is putting people with bombs in the cargo.  With the new bill implementing cockpit doors, this will eliminate the potential danger of people fitting in cargo and busting in the cockpit.  This was never a discussion before the new FAA Reauthorization Bill came out.  I strongly believe this is very smart, and in the industry and the way the world is today, it is defiantly better to be safe then sorry.