Delta Sues Ex-Im Bank Over Non-U.S. Airline Guarantees
Delta Air Lines Inc. (DAL) asked a federal judge to block U.S. Export-Import Bank loan guarantees for foreign carriers’ purchases of Boeing Co. (BA) aircraft, claiming harm to American businesses wasn’t properly analyzed.
Delta, in a lawsuit filed today in federal court in Washington, seeks to stop guarantees of more than $100 million approved for Emirates Airlines, LOT Polish Airlines, Etihad Airways, Latam Airlines Group (LFL) and Korean Air Lines. The bank violated the law by approving the guarantees “without any consideration of plaintiffs’ comments and the adverse effects on U.S. industry and employment,” according to the complaint.
“Because Ex-Im Bank loan guarantees lower their cost of capital, these foreign airlines will recoup their investment in their new aircraft faster or reduce ticket prices on competing routes without adversely impacting their relative rate of return on those investments,” Delta said in its complaint, which was joined by Hawaiian Airlines Inc. and the Air Line Pilots Association.
The lawsuit today is the third one filed against the bank by U.S. airlines seeking to stop loan guarantees to non-U.S. airlines. A federal judge in Washington is currently weighing Delta’s challenge to the bank’s regulations and guidelines on economic procedures which are to take effect this month.
The pilots group is awaiting an appeals court ruling of a November 2011 lawsuit claiming the bank didn’t seek public comment or consider the effect on the U.S. airline industry before approving $1.3 billion in loan guarantees and $2.1 billion in preliminary commitments to support the sale of 30 Boeing aircraft to Mumbai-based Air India Ltd.
Phil Cogan, a spokesman for the bank, said he wasn’t aware of the lawsuit and couldn’t immediately comment on it.
The case is Delta Air Lines Inc. v. Export-Import Bank of the U.S., 13-cv-00424, U.S. District Court, District of Columbia (Washington).
To contact the reporter on this story: Tom Schoenberg in Washington at firstname.lastname@example.org