US airline body files suit to halt loans to AI | india | Hindustan Times
Today in New Delhi, India
Dec 03, 2016-Saturday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

US airline body files suit to halt loans to AI

india Updated: Nov 18, 2011 02:19 IST
Yashwant Raj
Yashwant Raj
Hindustan Times
Highlight Story

US aviation industry body, the Air Transport Association of America, on Wednesday sued the US Ex-Im bank to stop it from extending a loan to Air India to enable it buy 30 American planes, arguing they will cause loss of local jobs.

The bank, which approved $1.3 billion earlier this month and was about to clear the next $2.1 billion for aircraft purchase, extends such loans to create jobs in the US.

The association has asked a Washington court to stop the Ex-Im bank from extending the loan guarantee.

“The US loan guarantees enable foreign carriers to obtain financing for aircraft at considerably lower rates than what US airlines must pay on the commercial market,” the trade body said in its suit.

The association has argued that having received more than $52 billion in US taxpayer-funded loan guarantees over the last 10 years, foreign carriers have added capacity and gained market share on US-international routes, forcing some US carriers to cut routes.

“A reduction in capacity means fewer US airline jobs. Ex-Im Bank guarantees to foreign carriers have forced US airlines to cut between 4,100 and 7,500 jobs, costing employees $372-684 million in lost income,” it said.

US Ex-IM bank’s exposure in India stood at $5.5 billion till July 2011, which chairman Fred P Hochberg said, supported 10,000 American jobs.