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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.

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