White House Adjusts Airline Foreign Ownership Plan

The Transportation Department announced a revision, strengthening restrictions on foreign investors' ability to make decisions about safety, security and national defense obligations.


The Bush administration on Wednesday moved to defuse opposition to its plan to give foreign investors more management control of U.S. airlines.

The European Union wants the rules loosened over foreign control of U.S. airlines as a prerequisite to a new treaty between the two airline markets.

The "open skies" agreement would allow EU and U.S. airlines to fly wherever they want and charge whatever they want for trans-Atlantic flights.

Advocates hope such a deal will increase air travel, lower air fares and create jobs.

The Transportation Department on Wednesday announced a revision to its earlier proposal on foreign control, strengthening restrictions on foreign investors' ability to make decisions about safety, security and national defense obligations.

The changes would not lift the limit of 25 percent foreign ownership of U.S. airlines, department officials have said.

Some airlines and labor unions say they are concerned that the plan could undermine national security.

A provision to delay the plan is part of a budget bill that the Senate was expected to vote on Thursday. A similar proposal in the House has more than 150 sponsors.

The Senate Commerce, Science and Transportation Committee will discuss the administration's proposal on Tuesday.

EU and U.S. officials had wanted the treaty approved by next month, when President Bush is due to meet EU leaders at a summit in Austria.

The EU still hopes to sign the deal this year, said Stefaan De Rynck, the EU's transport spokesman.

Under the current agreements, European airlines can only fly to U.S. airports from airports in their home country. They risk losing U.S. landing rights if they merge, and so the industry has remained fragmented in Europe.

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On the Net:

Transportation Department: http://www.dot.gov


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