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While public chatter about liberalizing U.S. law governing
ownership and control of U.S. airlines seems never to cease, one
aspect of the controversy is almost totally inexplicable: why has
no legislation ever been drafted to accomplish the purpose or, at
the least, encourage open discussion and debate about the details
of doing so?
Almost seven years ago, the American Bar Association set up a
very knowledgeable and politically balanced Working Group of
aviation experts to study and report on the issue. They did so, and
their detailed and very worthwhile proposal was made public early
in 2005. It attracted immediate attention and praise, but resulted
in no draft legislation.
In August 2008, I wrote a wellpublicized article in which, after
describing the history and reciprocal requirements for liberalizing
airline ownership and control laws worldwide, I specifically
spelled out what I believed to be the five main requirements that
the U.S. Congress would insist upon as conditions for any change in
the current law. My effort attracted no public response nor any
attempt at draft legislation. Between my own effort and that of the
ABA Working Group, one would have thought that certainly by this
time legislation would have been drafted and the overall subject
opened for discussion on an issue-by-issue basis by and among all
the interested parties. That seems not to have occurred nor is it
likely to occur anytime soon unless those same interested parties
can be moved to action.
To that end, and despite the passage of several years, the five
legislative requirements that I outlined are still current and
warrant repetition today, as there is perhaps no better time than
the present finally to draft and publicly debate such
legislation.
Whether or not enactment will prove possible during this or any
of the next sessions of the Congress, a draft in hand will at least
ensure a focused public debate that may, hopefully, lead to
enactment at some near-term future date.
The five requirements are predicated on an amended statutory
system that allows total, i.e. 100%, ownership by qualifying
foreign interests:
(1) that all U.S. flag airlines, no matter
their ownership, be incorporated in the U.S. and be required to
comply with all applicable U.S. laws.
(2) that the aircraft fleets of all U.S. flag
airlines, no matter their ownership, be made immediately available
under a program acceptable to the Department of Defense whenever
that department makes a demand for aircraft (failing which the
airline may automatically lose its U.S. operating authority).
(3) that, absent stringent conditions mandating
neartotal passivity, no portion of a U.S. airline can be owned by
any foreign government, whether directly or indirectly through a
government-controlled sovereign wealth fund, or otherwise.
(4) that labor-protective conditions be adopted
to ensure that future owners of U.S. airlines do not in any way
discriminate against U.S. employees or in favor of their own
(foreign) employees; and
(5) that no individual or entity of foreign
nationality can own a controlling interest in a U.S. airline unless
the country of which the foreigner is a national not only has an
"open-skies" agreement with the U.S., but also clearly
and reciprocally allows U.S. citizens to own controlling interests
in its airlines.
It would not seem to be a Herculean task, with these
requirements in hand—supplemented by the detailed
discussion and conclusions of the ABA's 2005 Working
Group—to fashion draft legislation that would not only
meet the requirements but would, at the same time, open U.S.
airline ownership to the same kind of international competition as
faces all other industries worldwide. Moreover, if the U.S.
airlines and their current spokesmen are truly in good faith about
their oft-publicly stated desires to liberalize U.S. law on this
subject, they could find no one better suited nor able to draft the
legislation than the former staff director of the House
Transportation and Infrastructure Committee, David Heymsfeld.
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