United States airlines are attempting to block US$3.4 billion in US taxpayer-backed loan guarantees for Air India to buy Boeing aircraft.
The Air Transport Association, the leading US trade group for major carriers, has sought an injunction in US District Court in Columbia to stop financing arranged by the Export-Import Bank of the United States.
The Ex-Im bank is an independent agency that finances sales of American exports to international purchasers.
Airlines argue that low-interest credit assistance to foreign carriers violates federal law.
They also say that such financing puts them at a competitive disadvantage and that Air India’s losses and management troubles should disqualify it from financing.
Air India has ordered up to 50 long-range Boeing jets worth about US$6 billion in 2005.
Meanwhile, in India the chairman of the UB Group, Vijay Mallya, has denied speculation that the loss-making Kingfisher Airlines would be shutting down.
Mallya said that he wanted to clear the air of speculation surrounding the airline.
He said, “We cancelled some of our flights because we could not afford to fly on unprofitable routes. It was a commercially prudent decision.â€
