Ten global airlines that are among the biggest beneficiaries of U.S. and European
subsidies to buy jetliners called for an easing of rules on aircraft-export guarantees
to defuse an international dispute on the issue.

The carriers, including Ireland’s Ryanair Holdings PLC, Emirates Airline and Etihad Airways from the United Arab Emirates, and
Korean Air, said at a news conference Thursday in London that airlines from all
countries should be eligible for government support in buying planes from Airbus
and Boeing Co.

Under an informal agreement between the U.S. and European governments in 1986,
airlines from the home countries of Boeing and Airbus may not receive government
export support on the companies’ planes. Airbus is a unit of European Aeronautic Defence & Space Co.

Twenty-four airlines from the home countries—the U.S., France, Germany, the U.K.
and Spain—in October complained to their governments that the current arrangement
is unfair. Many carriers in the ineligible group want access to export-credit
financing, while some want it limited for all airlines from developed countries.

Export credit, which mainly consists of government guarantees to support commercial
loans for airlines to buy planes, currently underpins more than 30% of Airbus
and Boeing deliveries.

The 10 airlines, calling themselves the Aviation Alliance, are some of the biggest
buyers of airliners today. They want to ensure that export financing isn’t closed
off.

“We care caught in the cross fire,” Ryanair Chief Financial Officer Howard Millar
said in an interview.

Talks on international rules for government support to jetliner exports are under
way at the Organization for Economic Cooperation and Development in Paris. OECD
officials declined to comment on the status of the yearlong negotiations.

Countries involved have said they want to revise existing rules by the end of
this year, although some officials have said the talks could slip into next year.

The once-arcane subject of export credit has gained more prominence since the
recent credit crisis. Before the crisis, airlines from the five home countries
were able to fund airplane purchases inexpensively through highly developed capital
markets. But since financial markets froze up in 2008, commercial financing became
more expensive than funding backed by U.S. and European government guarantees.

“Export credit financing is essential to the continued growth of the aviation
industry,” the Aviation Alliance said in a statement. “We have come together today
to call for the extension of export credits to all airlines in the U.S. and Europe,
irrespective of whether they are based in a country which manufactures aircraft.”

Other airlines in the alliance are Cargolux of Luxembourg, Norwegian, Oman Air,
Pegasus of Turkey, Virgin Blue from Australia and Wizz Air from Hungary.

The group said the changes it proposed would “protect hundreds of thousands of
jobs.” Airlines from the Airbus and Boeing home countries have said export credit
hurts them and costs airline jobs.

The home-market rule developed because the U.S. Export-Import Bank, which supports
foreign sales of American products, is forbidden from financing Boeing’s domestic
sales. To establish a level playing field between Boeing and upstart Airbus in
the 1980s, both agreed not to seek export-credit support for sales into the other’s
home market.  

Mr. Millar called for an end to the home-market rule. “American carriers that
wish to buy Airbus should have access to export credit,” he said.

Industry officials say that’s unlikely to happen because Airbus could then have
a financing advantage over Boeing in the U.S. Because Airbus is based in four
countries, its home-country customers could theoretically get export support from
the other three countries.

A spokesman for Boeing said the company would need to see more details of the
group’s proposal before making a comment.