17-Nov-2011 9:29 AM

ATA to sue US Ex-In Bank over Air India loan guarantees

The Air Transport Association of America (ATA) filed (16-Nov-2011) suit against the Export-Import Bank of the United States (Ex-Im Bank) to halt a pending deal for USD3.4 billion in loan guarantees for aircraft financing to Air India, saying that it "fails to meet statutory requirements, including consideration of the impact on the US airline industry and US airline jobs". The Ex-Im Bank recently approved USD1.3 billion in loan guarantees for Air India, and is considering an additional USD2.1 billion in loan guarantees, to support the purchase of 30 aircraft, including 27 B787s for delivery between 2011-2015. In a suit filed with the US District Court of the District of Columbia, ATA asked the court to find the Air India loan-guarantee commitments unlawful, to prevent the loan guarantees from being issued, and to order injunctive relief requiring the Ex-Im Bank to comply with its statutory obligations. ATA also asserted the practices of Ex-Im Bank put US carriers at a commercial disadvantage to foreign carriers. Specifically, the US loan guarantees enable foreign carriers to obtain financing for aircraft at considerably lower rates, in some cases up to 50% lower, than what US airlines must pay on the commercial market, it claims. ATA added foreign carriers have received more than USD52 billion in US loan guarantees over the last 10 years. [more - original PR]

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