ATA seeks to halt US$3.4 billion loan to Air India

The Air Transport Association of America (ATA), the industry trade organisation for the leading US airlines comprising 90 per cent of all US airline passenger and cargo traffic, has announced it has filed suit against the US Export-Import Bank (Ex-Im Bank) to halt loan gurantees for Air India.


Air India Air Transport Association of America ATA Ex-Im Bank Export-Import Bank lawsuit loan gurantees


The Air Transport Association of America (ATA), the industry trade organisation for the leading US airlines comprising 90 per cent of all US airline passenger and cargo traffic, has announced it has filed suit against the US Export-Import Bank (Ex-Im Bank) to halt loan gurantees for Air India.

Troubled, state-owned Air India recently asked for 65 billion rupees (US$1.3 billion) in Indian federal government aid and won an agreement with lenders to cut annual interest payments by 13 billion rupees.

The ATA said the pending deal for US$3.4 billion in loan guarantees for aircraft financing to Air India is unlawful as 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 $1.3 billion in US taxpayer-backed loan guarantees for Air India and is considering an additional $2.1 billion in loan guarantees, to support the purchase of 30 aircraft, including 27 Boeing 787s for delivery between 2011-2015.

The ATA lawsuit claims US taxpayers could be left to foot the bill for any default by a foreign carrier on its loans. The association also claims that the practices of Ex-Im Bank put US carriers at a commercial disadvantage to foreign carriers because the loan guarantees enable foreign carriers to obtain financing for aircraft at rates up to 50 per cent lower than what US airlines must pay on the commercial market.