US delay on foreign airline ownership rules will miss key EU October vote

Washington DC
Source: Flightglobal.com
This story is sourced from Flightglobal.com

A key revision to US airline foreign ownership rules will miss the crucial European Commisison October deadline, Flight has learnt, due to a delay by the US Congress.

A leading US official today told Flight that US president George Bush’s administration will not be able to implement revisions to the country’s restriction on foreign involvement in domestic carriers by an October meeting of European Union ministers, which was expected to mark a vote on a proposed liberalised transatlantic air accord.

In a telephone interview, US State Department deputy assistant secretary John Byerly said the government’s decision to delay implementation of the changes - which relax involvement of foreign citizens but maintain investment limits - from the mid-August approval recently endorsed by the Department of Transportation (DoT), was due to an inability “to allow us [the US government] to address the concerns of the [US] Congress”.

He added that this delay will extend beyond the EU ministers’ meeting, but noted: “We are still firmly committed to finalising the US/EU ‘open skies’ accord by the end of the year.”

In a statement released late yesterday, US representative James Oberstar, the ranking member of the US House Transportation and Infrastructure Committee (and a vocal opponent to the proposed changes) says: “The [US DoT] is not planning to abandon the rule change entirely, but will not move to make the rule change final in August, as originally planned.”

The unexpected delay is in response to the US Congress’s concern that the proposed changes, which relaxed the role of foreigners without changing investment limitation, would adversely affect t the USA’s negotiation in ongoing air accord talks with the European Union.

EU officials have publicly said a change to the USA’s foreign ownership requirements is a key determinant in its forthcoming vote on a proposed liberalised transatlantic air agreement.

“I am very pleased that [the] DOT is responding to the concerns voiced by myself and other members of Congress,” says Oberstar. “This proposed rule constitutes a major change in public policy, and would create serious problems in safety, security, national defense, and loss of US jobs.

“I believe that bypassing Congress and making such a change through the rulemaking process is unconstitutional. I expect that DOT’s further discussions with the EU and the Congress will be open and frank.”

No one from the Bush administration was immediately available for comment