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Category: Northwest News
Date: 17 Dec 2005
Time: 20:51:36 -0500
Remote Name: 219.127.227.66
US House plan would slow airline ownership change Thu Dec 15, 2005 4:32 PM ET WASHINGTON, Dec 15 (Reuters) - A bipartisan proposal introduced in the U.S. House of Representatives would slow attempts by the Bush administration to ease rules that restrict foreign ownership in domestic airlines, congressional officials said on Thursday. The bill proposed by Rep. James Oberstar, a Minnesota Democrat, and Frank LoBiondo, a New Jersey Republican, would prohibit the Transportation Department from issuing a final decision on its plan to relax ownership limits for one year. In addition, any change would have to be approved by Congress. The Transportation Department could finalize its proposed regulation within weeks so Congress would have to act quickly to head off any change. Congressional Democrats, many of then sympathetic to the plight of ailing airline unions, oppose the measure on grounds the change to allow more overseas influence in decisions about airline operations could impact routes, fleet size, staffing and work rules. "This is contrary to the requirements of law and would have a major impact on air service in the United States and jobs for U.S. citizens," Oberstar said. Lawmakers also are angry the administration is proposing to bypass Congress. For decades, federal law has limited foreign investment and control of U.S. airlines in part to keep out overseas competitors and ensure the fleet could be used by the Defense Department for military airlift purposes. Attempts in recent years by the administration to relax the overseas investment ceiling of 25 percent voting stock, as well as restrictions on what role those investors could have in decision making have been quashed by lawmakers. The current plan does not propose to change the investment cap. Most big airlines, some of which would welcome a new source of capital, have openly supported the proposal or have been publicly neutral. Continental Airlines (CAL.N: Quote, Profile, Research), however, has been an outspoken opponent. Continental says action by the Transportation Department on an issue previously brought before Congress for approval could create uncertainty among potential investors about whether the change would be legal. The airline said such uncertainty could prompt shareholder disputes and litigation.