Jetrader - September/October 2013 - 39

The impact of this
ruling is not yet
known; although, a
reversal of the decision
to provide Air India
credit support is
unlikely.

may have spurred Congress to action so
that Ex-Im Bank must now account for
the impact to the suppliers of capacity,
and not just the suppliers of aircraft.
This, coupled with the Aircraft Sector
Understanding (ASU), will undoubtedly
have their impact.
Don Mitchell is a partner with the law ﬁrm
of Smith, Gambrell & Russell, LLP and concentrates his practice in U.S. and cross-border
aviation equipment finance transactions
and litigation. Please email any questions,

comments or suggestions for future topics
to: dmitchell@sgrlaw.com.
©2013 Donald B. Mitchell

Endnotes
1 12 U.S.C. § 635 (the enabling legislation for the US
Ex-Im Bank, or “Bank Act”)
2 12 U.S.C. § 635
3 ht t p://w w w.e x im.gov/gener al bankpolic ies/
economicimpact/
4 Delta’s First Amended Complaint
5 More detailed information may be found at this link:
http://www.exim.gov/generalbankpolicies/economicimpact/upload/Final-April-2013-Procedures.pdf
6 See joint comments of Delta and ALPA to Etihad application for Ex-Im support of 777 aircraft purchase.

is up to Congress to amend the law and
require more if it sees ﬁt. Summary judgment (judgment before trial) was granted
in favor of Ex-Im Bank.
Delta Air Lines appealed. The U.S. Court
of Appeals “split the baby” by reversing
the judgment of the lower court, but
permitting the Air India credit support
to proceed. The court’s opinion rejected
Delta Air Line’s argument that seat capacity was a commodity under the Bank
Act. It concluded that the dispute arose,
“because the [EIP] procedures categorically
determine that loans and loan guarantees
to foreign service providers will not affect
U.S. industries and U.S. jobs.” It is the
categorical assessment that this credit
support can never cause adverse effects
to U.S. industries, without reasonable
explanation, that violates the Bank Act
and related legislation. The Ex-Im Bank was
USA: 954-421-2510
ordered to provide reasonable explanation
sales@tesllc.aero | www.tesllc.aero
in the context of the Air India support
4700 Lyons Technology Parkway | Coconut Creek, FL 33073
or consider and then explain the impact.
The impact of this ruling is not yet
known; although, a reversal of the deci615938_Trade.indd 1
18/11/12
sion to provide Air India credit support
is unlikely. What is known is that in the
Export-Import Bank Reauthorization Act
of 2012, the U.S. Congress mandated that
the bank revisit its EIPs. In response, the
Ex-Im Bank approved new EIPs that became
effective in April 2013. In these new EIPs,
the Ex-Im Bank acknowledged the need
and implemented additional guidelines
concerning the review of potential economic impact on services as it relates to
the credit support for aircraft sales. The
guidelines provide for heightened review
when the impact could be “substantial.”
Life Cycle Solutions© for monetary recovery We’re looking for a few good engines.
This is now deﬁned as an increase to
capacity of at least 1 percent.5 Whether
these new EIPs will change the free ﬂow
al.vorhauer@internationalaircraft.com
www.internationalaircraft.com
International Aircraft Associates, Inc.
of export credit support for aircraft sales
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remains to be seen. Delta Air Lines believes
possibly not.6 Their suit, if nothing else,

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639650_International.indd 1

4:22 AM

Jetrader • September/October 01/05/13 39 PM
2013 8:09

http://www.exim.gov/generalbankpolicies/economicimpact/ http://www.exim.gov/generalbankpolicies/economicimpact/ http://www.tesllc.aero http://www.tesllc.aero http://www.internationalaircraft.com http://www.internationalaircraft.com

Jetrader - September/October 2013

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