Airline merger hearing raises specter of fight to maintain cabotage, foreign ownership and control rules

On Tuesday, the House Judiciary Committee’s Regulatory Reform, Commercial and Antitrust Law subcommittee held a hearing on the pending merger of American and U.S. Airways.  While much of the conversation focused on the impact of the merger on prices and consumers, one witness told lawmakers that after the merger foreign control and ownership restrictions and cabotage rules should be relaxed.

Dr. Clifford Winston of the Brookings Institution testified that “If policymakers are concerned that the proposed American-US Airways merger may have anti-competitive effects…then an effective way to address those concerns, obtain the efficiency gains, and significantly benefit travelers would be to take steps to stimulate addition competition by creating a deregulated global airline industry…. The final step to create a highly competitive global airline industry would be for the United States to allow foreign airlines to serve U.S. domestic markets.” 

Dr. Winston continued, “Clearly, competition would be even more intense in U.S. markets and travelers would benefit from lower fares and service improvements if their choice of carriers were expanded to include discount carriers like Ryanair and global players like Qantas and British Airways.

In defending the policy of expanded foreign access to U.S. markets, Dr. Winston told the panel:  “If you think that’s a strange policy, then think about autos.”

Efforts to weaken foreign control and ownership standards and cabotage restrictions present a significant threat to the careers of ALPA pilots and the future of the U.S. airline industry.  The current rules are rooted in basic security considerations and ensure that U.S. airline employees maintain a fair share of international flying opportunities.  ALPA opposes all efforts to weaken or modify foreign ownership and cabotage rules.  Read more about ALPA’s position to this proposal here.

This entry was posted in Foreign Ownership, Leveling the Playing Field and tagged , , . Bookmark the permalink.

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