Washington DC 'open to reviewing' ownership as EU presses for free air transport zone

American Airlines chief Don Carty is calling for the US Department of Transportation (DoT) to review regulations restricting foreign ownership in US carriers and access by non-US operators to the country's domestic market (cabotage). Carty says 11 September has made it imperative that the USA should face up to these issues previously considered "off limits or taboo".

The DoT says that it is "open to reviewing the issue" of foreign investment in US airlines - limited to 25% voting stock and 49% total - but admits that cabotage has not been "put on the table". Carty, speaking at the American Association of Airport Executives seminar on 20 May, said of cabotage: "I'm not afraid of it, and neither should anyone else be, so long as it's reciprocal."

Carty added: "For too long we have treated certain topics as off-limits, or taboo. In the post-9/11 world, that's a luxury we can no longer afford. At a time of unprecedented financial crisis, when the very survival of many carriers is in question, what sense does it make to cut our industry off from half the world's supply of capital?" He said he would "encourage Congress to amend the law to provide for foreign investment if allowed on a fully reciprocal basis".

US industry must also update airport ownership laws, labour laws and implement more efficient security arrangements, he said.

Meanwhile, European Union transport commissioner Loyola de Palacio has recently visited the USA twice to push for a "transatlantic common aviation area" between the EU and the USA, which would effectively be a free trade zone for air transport operations. De Palacio introduced the idea at the World Economic Forum in New York in February, and in May discussed it with the US deputy secretary of transportation Michael Jackson.

De Palacio's office says she made it clear that negotiations of this type are soon going to become vital, because the advocate general (AG) of the European Court recently delivered a preliminary assessment of a ground-breaking case being heard.

The European Commission has charged that bilateral agreements between European Union member states and other states, including the USA, are contrary to the Treaty of Rome. The AG says initial hearings find that nationally agreed, rather than EU-negotiated, bilaterals are illegal, but the final ruling will be given in September.

Source: Flight International