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Political wrangling in the U.S. could threaten the Norwegian's aircraft Purchase - reportsSunday, 18 March 2012
Norwegian budget airline, Norwegian has announced that it was to make a purchase of a large number of planes from the USA but the company now fears that the political wrangling in the USA could affect the aircraft purchase business.
Norwegian also fears that Export Credits, one of their sure sources of funding might slip off their hands. However, there is the feeling that the Norwegian believes that the Americans have an interest in reaching agreement and want to push their fears to the background.
There is currently a high political game in Washington within the export financing institute, Export-Import Bank, which at worst can lead to the bank's activities to be closed, at least temporarily.
That may then mean problems for the Norwegian airline, Norwegian, which is dependent on export credits to finance the massive aircraft purchase that is being planned for the coming years, according to business media reports in Norway on Saturday.
Norwegian announced in January that it will buy 222 new aircraft over the next few years, including 122 from the U.S. Boeing, one of the largest partners of Ex-Im Bank, the Bank generally called. There are also loans for the purchase of these aircraft which at worst can be threatened.
Republicans in the lower house of Congress are reluctant namely, to renew the license and the credit limit to Ex-Im Bank. This is partly due to fear of default of the loans given to support U.S. export contracts, according to news agency Reuters.
But Republicans also want the U.S. to negotiate internationally for a significant reduction of air transport subsidies, and that it should be examined carefully whether this type of loan may damage the U.S. companies when they go to competing foreign companies.
Whether the bank will survives or not, this is thus creating a situation of uncertainty for the loans to Norwegian, according to reports.
President Barack Obama and the Democrats want to raise the ceiling for loans, Ex-Im can provide for 140 billion US dollars from the current $100 billion, the Bank will soon reach. Unless Congress reaches a compromise, the bank will have to stop to lend money in May.
But Norwegian stressed on Saturday that the company does not see any reason to be worried about in terms of loans for the purchase of American aircraft. Norwegian particularly points out that for the U.S. politicians it will be of great interest to reach a solution, because the opposite would be very negative for the flagship company, Boeing, for example.
“We have no evidence that the aircraft purchase will be threatened. It's hard to imagine that Americans will send operators who need new aircraft into the arms of the Europeans that is Airbus. Remember that export guarantees are there to support their own country's industry,” writes Vice President Anne-Sissel Skånvik in a sms to the Norwegian business daily, Dagens Næringsliv.
By Scancomark.se Team
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