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ATA's lawsuit against US Ex-Im Bank for Air India loan begins effort on tightening loan conditions


The Air Transport Association of America (ATA), in an unusual move, filed suit against the Export-Import Bank of the United States (Ex-Im Bank) on 16-Nov-2011 to halt a pending deal for USD3.4 billion in loan guarantees for aircraft financing to Air India. The ATA has alleged the Ex-Im Bank "fails to meet statutory requirements, including consideration of the impact on the US airline industry and US airline jobs”.

In an earlier letter to Ex-Im Bank chairman, Fred Hochberg (who is also being sued by ATA) in early Nov-2011, ATA noted Air India’s financial and management troubles, warning that the Ex-Im Bank was disregarding the obligations to “protect the public coffers” by providing loan guarantees to a “credit-risky” company. ATA said Air India’s losses and management troubles should disqualify it from financing, describing the Indian flag carrier as “one of the shakiest, riskiest and most poorly run airlines in the world”. ATA added that the carrier’s poor financial status should disqualify it from such US assistance. [3245 words]

Unlock the following content in this report:


  • Ex-Im Bank to provide USD1.3bn in loan guarantees for Air India; considering additional USD2.1bn in loan guarantees
  • Air India still in discussions regarding B787 delivery schedule, unperturbed by lawsuit
  • The issue is with the broader functioning of the Ex-Im Bank
  • Foreign airlines receive more than USD52bn in US loan guarantees over past decade: ATA
  • Escalates ongoing dispute between airlines/ATA and Ex-Im Bank/Boeing
  • American and United Continental opt out
  • Is Ex-Im Bank being criticised for doing what it is designed to do? 
  • Export credit agency funding increasingly important in present economic environment

Graphs and data:

  • India to US (seats per week, one way): 19-Sep-2011 to 12-May-2012
  • India projected delivery dates all aircraft as at 11-Nov-2011
  • Indian carrier fleet size: current fleet
  • Indian carrier fleet size: on order fleet
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