Delta Air Lines launched a suit on Wednesday against the United States Export-Import Bank, alleging that the bank did not properly assess its impact on U.S. businesses when it financed purchases by foreign airlines, reported Bloomberg:
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 Export-Import Bank helps American companies export into foreign markets by helping finance the purchase of American-made goods, typically with loan guarantees.
More than 80 percent of the bank’s financing in fiscal year 2012 went to the American airplane manufacturer Boeing, which competes with the heavily subsidized European manufacturer Airbus, reported Timothy Carney of the Washington Examiner last year.
According to Bloomberg, this is not the first lawsuit brought against the Export-Import Bank by U.S. airlines nor is it the first time Delta has complained about the bank’s work.
Delta complained that the bank was supporting its competitors, including an Indian airline that forced Delta to shutdown a direct flight from New York to India during the fight over the bank’s reauthorization last year. The bank’s president contended at the time that the bank always does impact studies before issuing any financing.
Hawaiian Airlines and the Air Line Pilots Association have joined Delta’s lawsuit, according to Bloomberg. The pilots association is waiting for a court to rule on another suit of theirs against the bank, as well.