Ex-Im: Help or Hinderance

"Boeing’s recent assertion that the appetite of capital markets to fund airliner orders has increased comes as especially welcome news to manufacturers and their customers at a time when other sources of funding seem under pressure."

The Ex-Im Bank is the official export credit agency of the United States. It assists in the financing of US exports to companies that normally would not be able to get credit in the private sector. In addition the bank provides funds to fill gaps in financing, enabling the export of American goods and services to many markets.

Those in the US aviation industry have levied claims that the financing provided by the Ex-Im Bank amounts to anticompetitive assistance because US organizations are not eligible for the same financing (usually at a significantly lower rate). Fast growing carriers in Middle East and Asian countries are able to access relatively cheap financing, to purchase large US aircraft, which are then used to compete against US companies. It is claimed by US based groups and carriers that foreign companies have a competitive advantage provided by the Ex-Im Bank due to their cheap financing and lower cost structures (cheap labor).

I do not think there is much, if any impact on the US aviation industry due to the actions of the Ex-Im Bank. The majority of carriers receiving the benefits of the Ex-Im Bank pose no threat to US companies due to their inefficient locations relative to the US or because they are operated on routes us carriers do not/would not serve. Furthermore, the argument that because of the financing provided by the Ex-Im Bank US companies are at a disadvantage is false. US companies are able to access credit that is still much cheaper than what the Ex-Im is providing to foreign companies. Also keep in mind the Ex-Im is ensuring (in some part) orders for Boeing aircraft and other US goods continue and grow by tapping new markets, instead driving sales to countries (i.e. Airbus). By offering financing, the Ex-Im is supporting jobs in the aviation industry.

The Future and UAVs

Over the past several weeks, numerous articles have been published on the topic of UAVs and their civil and government/military roles. Focusing first on civil UAVs, several large organizations have publicly announced new ventures using UAVs. Facebook recently purchased a UAV company with the intent on providing Internet to those in rural areas, and Amazon and UPS are trialing package delivery by UAVs. Other civil uses are also include crop-dusting, search and rescue and facility security. It is important to note that the FAA currently restricts the commercial, for money, use of UVAs. Civil operators of UAVs are required to obtain FAA approval, usually an experimental license, to fly UAVs for research and flight demonstrations. Use in Class B airspace is prohibited, except if granted express approval by the FAA. There are no regulations targeting recreational users of UAVs. A recent ruling by the NTSB has cast doubt the FAA’s ability to regulate the use of UAVs, as there is a small amount of expressly written regulations. The limited regulation is posing a challenge to the integration of UAVs into the NAS, which is scheduled to being in 2015 (albeit an incremental approach). The integration is planned in several phases to ensure safety and efficiency. All UAVs operating in the NAS will be required to have “sense and avoid” technologies and will require the development of command and control frequencies and ground control stations. Implementation of UAVs into the NAS poses additional problems the FAA will have to overcome.The growth in UAV traffic is expected to be immense, and may reduce the efficiency of our already congested air space. Due to the military and privacy fears, public perception of drones fairly negative. Many in the general public are not comfortable with the thought of camera-equipped robots flying above their head, even if that thought is not a correct assumption. Organizations and companies will have to fight to earn the publics trust, and prove UAVs do not infringe on privacy. As previously stated, UAV growth is expected to be immense, with the industry expected to be worth $582 billion by 2020. This growth is likely to create many new job positions; UAVJobs offers a modest list of current UAV positions available, expect the number to grow. There are a wide range of positions some of which include human factors analysts, operators, department managers, and mechanics.

As many of us know, UAVs are and have been taking a more prominent role in our military, reducing the number of inefficient planes and soldiers in harms way. A recent budget proposal by Defense Secretary Chuck Hagel has the military cutting costs and increasing the number of drones in order to realign with current geopolitical and spending constraints. UAVs have proven to be safer and far more efficient to use than standard military equipment, however, as with any military operation errors can be made. Ethical questions of the use of UAVs can be raised because of questionable operations and accidental deaths.  Should the United States fly UAVs into the airspace of sovereign nations? Is enough being done to ensure those being targeted by UAVs are the correct target? I’ll let you, the reader, decided.