April 4 Delta Air Lines Inc has sued the
Export-Import Bank of the United States over loan guarantees
given to support purchases of Boeing Co's widebody planes
by certain foreign airlines, according to a court filing.
Delta said that Ex-Im bank's subsidies to foreign airlines,
including Emirates Airlines, Etihad Airways and Korean Air Co
Ltd, to help them buy Boeing planes would cause
adverse economic effects on U.S. airlines and their employees.
Delta said in the filing that the bank did not properly
analyze the adverse economic impact and has requested the
district court in Washington D.C. block any loan guarantees.
The airline industry had its worst decade ever after the
Sept. 11 attacks on the World Trade Center and the Pentagon in
2001, racking up billions of dollars in losses and destroying
share value in airlines that went bankrupt. However, U.S.
airlines have cut unprofitable routes and raised ticket prices
to recover in recent years.
Ex-Im Bank, a U.S. government agency, provides loan
guarantees and direct loans to help companies maintain and
create U.S. jobs.
In a complaint filed in federal court in Washington D.C.
late on Wednesday, Delta said one of the types of exports that
Ex-Im Bank subsidizes is the export of aircraft by U.S.
manufacturers, especially ones made by Boeing.
"In 2012, the bank's total exposure to outstanding financial
commitments was $106.6 billion. About 46 percent of this amount
was for air transportation loans and loan guarantees, more than
the three next largest industrial sectors combined," Delta said
in the filing.
Delta said the Ex-Im Bank loan guarantees help lower the
cost of capital for foreign airline companies.
"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 the filing.
Delta argued that unsubsidized U.S. airlines will be forced
to respond by "reducing their prices and reducing or altogether
eliminating their capacity to serve those routes where they
compete with bank-subsidized foreign airlines."
Ex-Im Bank officials could not be reached for comment by
Reuters outside of regular U.S. business hours.
The case is Delta Air Lines vs Export-Import Bank of the
U.S., Case No. 13-00424, U.S. District Court, District of