Interesting to compare this to the $328 million loan guarantee to Romania for completion of Cernavoda 2.
Wonder too, whether aerospace companies have to produce an EIS on sales of dozens of jet planes ? (noise, air pollution, risk of accidents & misuse, etc., etc.)
The Montreal Gazette, 7 Jan. 2003
Ottawa flies in another hefty loan for a Bombardier regional-jet customer
But a 47-jet deal is up in air without UAL guarantees
ALLAN SWIFT CANADIAN PRESS
The federal agency that provides controversial cut-rate financing to help airlines buy regional jets from Bombardier Inc. says its loans are 97.5-percent performing.
Spokesman Rod Giles of Export Development Canada, in defending its latest loan to a U.S. airline, said yesterday this means that holders of only 2.5 per cent of its aerospace loans are not meeting interest payments.
The EDC aerospace portfolio just grew by another $100 million, it was disclosed yesterday, with a new loan to Comair Inc., a subsidiary of Delia Air Lines, in a deal signed last month.
This is on top of previous EDC loans used by Comair to purchase regional jets from Bombardier, whose aerospace production has slowed, particularly in business jets.
Giles said he could not provide a breakdown of EDC loans to Bombardier clients, but he said the agency’s total aerospace loan portfolio amounts to $5.8 billion. The vast majority helped clients of Bombardier Aerospace to buy its popular regional jets. Other customers include Air Wisconsin and Atlantic Coast Airlines.
Atlantic Coast said in a court filing yesterday that it will have trouble paying for the remaining 47 regional jets it has ordered from Bombardier if its main partner, bankrupt UAL’s United Airlines, does not give a clear indication that it will honour its Atlantic contracts.
Bombardier spokesperson Dominique Dionne said yesterday she was unaware of any order cancellations.
Although U.S.-based airlines might be capable of financing aircraft purchases on their own, EDC became involved to counter Brazil’s government subsidies on jet sales by Embraer, Bombardier’s main competitor.
The World Trade Organization found both countries guilty of unfair trade practices, but the subsidies continue while negotiations on the subsidy dispute continue. Giles said the EDC aerospace-loan-payback rate indicates the sector is viable.
An industry association report on aviation in 2002 said that despite the aviation slowdown of the last two years, regional-jet service has increased in the United States, the world’s largest aviation market, mainly because the smaller aircraft are easier to operate profitably.