Foreign Interests Controlling U.S. Airlines?
In November 2005, the U.S. Department of Transportation launched a brazen bid to change deep-rooted public policy and permit foreign investors to control nearly all commercial aspects of a U.S. airline’s business and operations.
Under the DOT proposal, which came in the form of a notice of proposed rulemaking (NPRM), foreign interests, including foreign airlines, could control fleet planning, route structure, pricing, and marketing of U.S. air carriers.
ALPA adamantly opposes DOT’s proposal because:
It violates federal law prohibiting foreign control
A foreign airline could change a U.S. carrier’s schedules, fleet composition, etc., to feed its own international operations, to the detriment of U.S. carriers and their employees
It could allow foreign interests to control the transport of U.S. troops and supplies through the Civil Reserve Air Fleet (CRAF) program, through which U.S. airlines provide strategic airlift for the military
The DOT has not demonstrated a need for foreign investment in U.S. carriers, nor has it shown that investment will not occur absent such a change
When the Bush Administration tried to raise the voting stock cap from 25 percent to 49 percent in 2003, Capitol Hill roundly rejected the effort. Congress opposed that proposal so strongly that it included language in the Federal Aviation Administration's reauthorization bill to codify the rule that U.S. airlines must be under the actual control of U.S. citizens.
It is imperative that Congress reassert its authority over the DOT’s proposal and fully debate and decide whether any change to the long-standing law prohibiting foreign control of U.S. airlines is necessary.