US airlines bill seeks curb on foreign owners
Congress is considering legislation that would reinforce restrictions on foreign ownership of US airlines, in an attempt to ensure business for US carriers.
The Senate spending bill for the Federal Aviation Administration (FAA) includes language that would specify that US carriers should be controlled by US citizens.
The move comes as DHL Airways, part-owned by Deutsche Post, tries to convince the Department of Transportation (DOT) that it is not “effectively” foreign-owned. “If the present arrangement is allowed to stand, the Department of Transportation will set a precedent that allows foreign governments to compete with US companies for business which, by statute, is reserved to US carriers,” said Ted Stevens, the Alaska Republican who sponsored the language in the Senate bill.
Responding to a request by UPS and FedEx, the two largest shippers in the US, DOT is investigating whether DHL Airways breaches foreign ownership restrictions. But DHL argues that it is a US company since its majority owner is William Robinson, a US investor. DHL also argues that the DOT review is redundant since Deutsche Post plans to sell the carrier to a group of US investors, including John Dasburg, the DHL chairman and chief executive. The $57m transaction is scheduled to be completed by June 30.
DHL, which this year announced plans to acquire Airborne, another US air shipper, says UPS and FedEx are trying to protect their market share – a combined 80 per cent.
The move to reinforce ownership restrictions comes as the Bush administration is attempting to bolster the ailing US airline industry by making it easier for foreign carriers to own stakes in US airlines.
The Bush administration has asked Congress to include language in the FAA reauthorisation bill that would ease such restrictions. Norman Mineta, the transportation secretary, urged Congress to raise the foreign ownership cap to 49 per cent from 25 per cent. But the House and Senate, concerned about foreign ownership of US airlines since the September 11 2001 terrorist attacks, failed to act on the administration’s request. The Senate’s FAA reauthorisation bill must be reconciled with the House’s version. The final bill is expected to include the ownership provision: Don Young, the Alaska Republican who chairs the House transportation committee, will chair the committee that reconciles the two bills – and is believed to favour the ownership restrictions.
The Senate version of the FAA reauthorisation bill also includes language that would impose US aviation safety standards on overseas facilities that repair US aircraft.
