Financial crisis in UAE carriers
It is expected that UAE airlines will face higher borrowing costs for new aircraft. This will happen shortly the Organisation for Economic Co-operation and Development approved to modify rules relating to government-backed export credits.
On Tuesday the agreement was reached. However it will take time to be confirmed by each member state by January 20. This agreement will part out rules that would make it easier for airlines in developing countries so as to back aircraft purchases.
Before this, airlines which are based outside of Europe and North America have been adequate for financial assurances and insurance provided by export credit organizations.
This has led to cheaper financing terms compared with airlines. These airlines are based in the five countries where Airbus and Boeing planes were manufactured. The rules and laws which are applied in this agreement were before used in 1986. This is done so as to avoid trade war.
It was held by the organization that the given terms would lead to would move fees closer to market rates and permit for usual adjustments so as to reflect market growth.
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