Airlines Industry Fighting Ex-Im Deal in India

The Export-Import Bank of the United States has been increasing its activity in providing export credit financing agreements between U.S. producers and companies based in India significantly in recent years. In fact, it’s become one of Ex-Im’s top two national markets for its serves. However, at least one trade organization wants to put the kibosh on a multi-million dollar project it says threatens the American airlines industry.

The Air Transport Association of America (ATA) filed suit against Ex-Im alleging that a partnership it is funding involving Air India did not properly take into account negative effects such a deal would have on the U.S. airline industry and job availability as per federal law. Ex-Im has already backed $1.3 billion in loan guarantees for the Air India project, which will support the purchase of upwards of 30 planes, and ATA alleges Ex-Im is considering backing an additional $2.1 billion.

ATA alleges “the practices of Ex-Im Bank puts U.S. carriers at a commercial disadvantage to foreign carries. Specifically, the U.S. loan guarantees enable foreign carriers to obtain financing at considerably lower rates, in some cases up to 50% lower…”

Noting that the Department of Justice is representing them in the matter, Ex-Im Spokesman Phil Cogan declined comment beyond the following statement:

“Since 1934, Ex-Im Bank has provided export credit financing for American companies in support of U.S. jobs in industries ranging from power and construction to aviation. Export credit financing ensures American companies and American workers have a level playing field in the increasingly competitive and challenging global markets. Ex-Im Bank is proud of its work on behalf of U.S companies and believes this litigation is without merit.”

Brian Shappell, NACM staff writer

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