A US court has rejected a plea by the Delta Airlines to vacate the US Export-Import Bank's support for the sale of 30 Boeing wide-body jets to Air India.
At the same time, the US Court of Appeals in Washington DC asked the Exim Bank to further explain its financing decision for the Air India transactions.
However, it chose to leave undisturbed the Bank's financing of the Air India transaction and did not question the Bank's flexibility in carrying out its statutory mandate.
The decision comes following the appeal by the Delta Airlines, Inc and the Airline Pilots Association of a lower court decision in July 2012 that determined that the Exim Bank improperly approved financing for purchases of certain Boeing aircraft by Air India.
In its lawsuit, Delta Airlines had alleged that Exim failed to consider the economic impact of its loan guarantees for the purchase of wide-bodied Boeing aircraft by Air India.
It alleged that Exim Bank's decision to provide a loan guarantee of $3.4 billion to Air India, to help it buy 30 aircraft from Boeing, would badly affect several US airlines, especially the Atlantic-based carrier, Delta.
"I am gratified by the court's recognition that these transactions should not be impeded by litigation.
"The Bank maintains significant flexibility in complying with its statutory mandates and its effort to support American jobs." said Fred P Hochberg, chairman and president of Exim Bank.
"This represents a victory for tens of thousands of American aerospace workers," he said.