New York : US pilots and airlines lost a bid to temporarily block the Export-Import Bank of the United States from providing Air India Ltd with $1.3 billion (Dh4.7 billion) in loan guarantees to buy Boeing Co aircraft.
US District Judge James Boasberg in Washington yesterday rejected arguments by trade associations for the largest US airlines and pilots who said allowing the guarantees to proceed while their legal challenge is being considered would harm domestic airlines. Boasberg's ruling comes three days before Boeing is scheduled to deliver one of its aircraft to Air India.
"Any injury to plaintiffs that may be caused by the delivery of one or two planes to Air India is, at this stage, wholly speculative," Boasberg said. None of the airlines participating in the lawsuit offer a direct flight between the US and India, the judge said.
Potential effect
The Air Transport Association of America, now called Airlines for America, filed the lawsuit in Nov-ember claiming the bank didn't seek public comment or consider the effect on the US 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.
At least 27 of those aircraft are the 787 Dreamliner, which lawyers for the trade groups said in a hearing last week are "dramatically efficient."
The groups asked the court to declare the loan-guarantee commitments unlawful, to prevent them from being issued, and to require the Export-Import Bank to study their potential effect on US industry and jobs.
The bank argued that the association lacks any legal basis to challenge the loan commitments and that blocking the commitments would be disastrous for the 77-year institution.
"[Yesterday's] ruling ensures that America's exporters will remain competitive and have a level playing field in the global marketplace," Phil Cogan, a spokesman for the bank, said in an emailed statement.
Devoted to planes
The Export-Import Bank is a federal agency that provides loans, loan guarantees and insurance to companies based outside the US. According to the lawsuit, the bank's loan portfolio is "overwhelmingly devoted" to financing the purchase of aeroplanes for export. In fiscal year 2010, air transportation loans accounted for 47 per cent of the bank's $75.2 billion (Dh276.2 billion) in total outstanding loans, according to the lawsuit.
The Air Line Pilots Association intervened in the lawsuit on the airlines' behalf.
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