US airlines sue EximBank over guarantee for Air India loan
The US airline industry has sued the Export Import Bank (Exim) alleging that its financial support to Air India will harm the American airlines.india Updated: Feb 20, 2012 22:26 IST
The US airline industry has sued the Export Import Bank (Exim) alleging that its financial support to Air India will harm the American airlines.
In a revised complaint filed before a US court last Friday, the Air Transport Association of America, Delta Air Line and Air Line Pilots' Association International, alleged that Exim Bank's decision to provide a loan guarantee of $3.4 billion to Air India to help it buy 30 aircraft from Boeing, would badly affect US airlines, Delta in particular.
Without the financial support from Exim Bank, Air India would not have purchased these aircraft, they said.
"The Bank's foreign beneficiaries have access to cheaper capital to finance their aircraft purchases," the complaint said.
"Delta's experience is illustrative. In 2006, Delta offered nonstop service between New York and Mumbai. Between 2006 and 2009, the Bank gave Air India loan guarantees totalling approximately $3.3 billion (and Air India flooded the market with extra capacity).
"Delta stopped flying from New York to Mumbai in October of 2008," the court affidavit said.
First Published: Feb 20, 2012 18:43 IST