The ambitious Bush administration plan to open skies between the USA and the European Union (EU) by encouraging foreign investment in US airlines appears sunk, drowned by the same frenzied opposition that overwhelmed a Gulf State ports purchase of a company controlling parts of six key US seaports.

As Dubai Ports World gave in to a furore and agreed to exclude US cargo-handling assets from its purchase of UK-based P&O, one the most powerful group of legislators, the House Appropriations Committee, moved to block the airline investment control plan by at least four months, saying: “The committee believes that the US aviation industry is part of our critical infrastructure as are the ports.” The panel was poised to use the power of the congressional purse to stymie the larger aviation liberalisation, and the 120-day delay it seeks puts an effective date for the new investment past a self-imposed deadline set by the European Commission (EC) and threatens the larger, long-delayed plan.

With it comes another barrier to US/EU aviation liberalisation, which the EC says will not advance without movement on investment rules. The head of the House armed services panel says he may include airlines in legislation to protect “critical infrastructure” from foreign control.

US Transportation officials insist that their investment proposal has been misinterpreted by congressional opponents, many from Texas and New Jersey where Continental Airlines has hubs and where the Texas-based airline has led the opposition. Although the larger liberalisation framework is not formally tied to the control issue, EC progress would require a massive effort of will. ■

Source: Airline Business