Bank Failed to Examine Air India Financing’s Effect on U.S. Airline Jobs
WASHINGTON—The Air Line Pilots Association, Int’l (ALPA) today hailed a federal appeals court decision to uphold a legal challenge by ALPA and Delta Air Lines maintaining that the U.S. Export-Import Bank had failed to meet its legal obligation to evaluate the potential effect on U.S. airlines and U.S. jobs before making loan guarantees to Air India for the purchase of wide-body aircraft.
ALPA and Delta argued that the Bank, in its decision to provide financing to Air India for 30 long-range, wide-body Boeing 787 and 777 aircraft, had failed to consider the negative effect these loans would have on U.S. airline jobs and U.S. airlines. In its ruling, the D.C. Circuit Court of Appeals ordered that the Bank either explain why the review required by governing statute was not necessary or fulfill its duty to evaluate the impact on U.S. industry and U.S. employees before granting financing to Air India.
“We feel optimistic that today’s court ruling is a step in the right direction to level the playing field for U.S. airlines by helping to ensure that the U.S. Ex–Im Bank is not giving foreign airlines an unfair competitive advantage and jeopardizing U.S. airline industry jobs,” said Capt. Lee Moak, ALPA president. “While Ex–Im Bank financing decisions have already harmed U.S. airlines and their workers, given the amount of financing the Bank intends to provide in the future, the need could not be more important for the Bank to fulfill its legal obligation to evaluate the risk to U.S. airlines and U.S. jobs before making financing decisions.”
In the past, the Bank has provided financing for hundreds of wide-body aircraft to foreign airlines. This financing is provided at rates and terms that are not available to U.S. airlines, and many of these Bank-subsidized wide-body aircraft are being used on routes that are, have been, or could be served by U.S. airlines. U.S. carriers have found that they have needed to withdraw from or not enter routes that might otherwise be economically viable.
In addition to the legal challenges, ALPA is calling on the Administration to enter into negotiations with the four European countries that support Airbus through export credit financing to eliminate export credit agency financing for all wide-body aircraft. ALPA does not expect the Export-Import Bank to unilaterally disarm in the wide-body aircraft subsidy back-and-forth with Europe, however, both sides have an incentive to wind this financing down. More information can be found in ALPA’s new report Leveling the Playing Field For U.S. Airlines and Their Employees.