Singapore Airlines (SIA) has publicly challenged the USA to follow through on its leadership in opening up world aviation markets by relaxing its "archaic" limits on foreign ownership of US carriers.
SIA chief executive Dr Cheong Choong Kong made the plea in March, saying the USA should not only push for more open skies air accords but also promote easing of ownership regulations.
"The USA is a champion of globalisation and free trade, a strong advocate of removing ownership controls on telecoms, banks and the like," Cheong says. "Why then is she retaining the archaic 25% limit on foreign ownership of US airlines? Why, having so admirably won the moral high ground by pioneering open skies bilaterals and the first open-skies multilateral, does it not remove this last bastion of protectionism?"
"What is it afraid of?" he asks. "That unqualified carriers will threaten the safety of US skies? Then lay down rules for qualification that are applicable to everyone, if these do not already exist. That national defence can be imperiled? Does any intelligent person still seriously believe this?"
SIA may have a vested interest in pushing for change, having itself started a spree of investments in foreign carriers. Last year it acquired a 49% stake in Virgin Atlantic, which itself has called for changes to US ownership rules. SIA also holds a 25% stake in Air New Zealand and is bidding for a stake in Air India in that country's privatisation push. "To establish true competition the United States must be prepared to take a lead in relaxing its rules on foreign ownership of airlines, and be open to potential cross-border mergers. It must push for open equity as well as open skies," Cheong argues.
"For the industry's potential to be realised governments everywhere must provide an environment for airlines to grow, innovate and make a profit. The United States, above all other nations, has the power to keep the ball rolling by showing the world what can be done in its own backyard."
Source: Airline Business