The USA has moved to liberalise its limits on foreign investment in US flag carriers in a major concession that may be too little for many and too late for action this year.
The policy shift came when Transportation Secretary Norm Mineta revealed to the IATA Annual General Meeting that he had asked Congress to lift the 25% cap on foreign investment in US flag carriers to 49%.
Delta chief executive Leo Mullin called Mineta's initiative "significant", while US Department of Transport (DoT) policy under secretary Jeff Shane, wondering out loud, asked: "Why stop at 49%?"
But the move comes too late for Mineta's chosen legislative path, the pending FAA bill, which has already passed the House and the Senate, leaving only a joint differences-reconciliation conference as the forum. However, an already controversial measure like this could easily die in the give and take of such a conference committee.
A key senator, Republican Ted Stevens of Alaska, has made it clear that he believes the current 25% cap must stay, and persuaded senators to include such a reaffirmation in their version of the bill. Stevens notes that he has a strong ally in the chairman of the House transportation committee, Don Young, who, like Stevens, is an Alaska Republican. Both will be key participants in the conference committee, due to sit this summer.
Stevens is moved by his concern over investment by Deutsche Post in air cargo carrier DHL Airways. FedEx and UPS contend the German company controls DHL. Stevens was also behind a move in April that ordered the DoT to investigate DHL's ownership, a probe that continues despite plans by former Northwest Airlines chief John Dasburg to buy DHL's US unit and rename it Astar.
Source: Airline Business
