Rogue5
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March 7, 2006
US Pushes for More Foreign Investment in Airlines
By REUTERS
Filed at 6:26 p.m. ET
WASHINGTON (Reuters) - The Bush administration will push ahead with a proposal to ease limits on foreign investment in U.S. airlines, despite some congressional pressure to slow down the plan or withdraw it, Transportation Secretary Norman Mineta said on Tuesday.
The proposed regulation was opposed earlier this year by mainly Democratic lawmakers concerned about the impact on U.S. jobs and airline service if global capital options for financially struggling domestic airlines were expanded.
But in recent weeks a few Republicans have begun to question whether the initiative is wise in light of the firestorm of controversy that has consumed plans by a Dubai-based company to manage six U.S. ports as part of its multibillion-dollar purchase of a rival British firm.
Many Republicans and Democrats in Congress, as well as state and local officials who lease port facilities, are worried that giving a company owned by the United Arab Emirates management control of key U.S. ports could undermine security.
The administration said any security concerns have been adequately addressed but pressure from Congress has forced a new review of the ports proposal.
While Mineta did not comment directly on the ports saga at a House of Representatives appropriations hearing on Tuesday, he did respond to concerns from two Republican lawmakers that the airline deal could pose similar security risks for the United States -- especially since the 2001 attacks on New York and Washington involved hijacked jetliners.
He also angrily denounced a three-page anonymous document circulating on Capitol Hill -- believed generated by an unnamed U.S. airline -- that also questions the wisdom of allowing more foreign investment in the airline industry.
``They're saying we're going to hand over the keys of the cockpit,'' Mineta said. ``That's not true. This paper is replete with inaccuracies.''
``There is nothing in the rule that would change the ownership law,'' Mineta said of federal standards that limit control of an airline to U.S. citizens.
It would, however, allow overseas investors more input in key airline company operating decisions in return for a maximum investment of 25 percent of voting stock.
``We want Americans to own American airlines. We're trying to split hairs,'' said Rep. John Culberson, a Texas Republican. ''This raises all kinds of red flags.''
Mineta resisted a suggestion by Culberson to pull the ownership proposal, or at least delay it. ``I don't believe we should postpone the rule,'' Mineta said.
``We gave this a lot of thought. When it comes to safety and security -- that's walled off,'' Mineta said.
There is little if any overseas capital in U.S. carriers. ACE Aviation Holdings, the parent of Air Canada, has an equity stake in US Airways.
In a separate interview, Rep. Frank LoBiondo of New Jersey, one of the first Republicans to openly question the administration's handling of the ports deal and original opponent of the airline ownership proposal on economic grounds, said it is appropriate to link the two in the security debate.
``One is as critical as the other -- these are critical infrastructure issues,'' LoBiondo said.
US Pushes for More Foreign Investment in Airlines
By REUTERS
Filed at 6:26 p.m. ET
WASHINGTON (Reuters) - The Bush administration will push ahead with a proposal to ease limits on foreign investment in U.S. airlines, despite some congressional pressure to slow down the plan or withdraw it, Transportation Secretary Norman Mineta said on Tuesday.
The proposed regulation was opposed earlier this year by mainly Democratic lawmakers concerned about the impact on U.S. jobs and airline service if global capital options for financially struggling domestic airlines were expanded.
But in recent weeks a few Republicans have begun to question whether the initiative is wise in light of the firestorm of controversy that has consumed plans by a Dubai-based company to manage six U.S. ports as part of its multibillion-dollar purchase of a rival British firm.
Many Republicans and Democrats in Congress, as well as state and local officials who lease port facilities, are worried that giving a company owned by the United Arab Emirates management control of key U.S. ports could undermine security.
The administration said any security concerns have been adequately addressed but pressure from Congress has forced a new review of the ports proposal.
While Mineta did not comment directly on the ports saga at a House of Representatives appropriations hearing on Tuesday, he did respond to concerns from two Republican lawmakers that the airline deal could pose similar security risks for the United States -- especially since the 2001 attacks on New York and Washington involved hijacked jetliners.
He also angrily denounced a three-page anonymous document circulating on Capitol Hill -- believed generated by an unnamed U.S. airline -- that also questions the wisdom of allowing more foreign investment in the airline industry.
``They're saying we're going to hand over the keys of the cockpit,'' Mineta said. ``That's not true. This paper is replete with inaccuracies.''
``There is nothing in the rule that would change the ownership law,'' Mineta said of federal standards that limit control of an airline to U.S. citizens.
It would, however, allow overseas investors more input in key airline company operating decisions in return for a maximum investment of 25 percent of voting stock.
``We want Americans to own American airlines. We're trying to split hairs,'' said Rep. John Culberson, a Texas Republican. ''This raises all kinds of red flags.''
Mineta resisted a suggestion by Culberson to pull the ownership proposal, or at least delay it. ``I don't believe we should postpone the rule,'' Mineta said.
``We gave this a lot of thought. When it comes to safety and security -- that's walled off,'' Mineta said.
There is little if any overseas capital in U.S. carriers. ACE Aviation Holdings, the parent of Air Canada, has an equity stake in US Airways.
In a separate interview, Rep. Frank LoBiondo of New Jersey, one of the first Republicans to openly question the administration's handling of the ports deal and original opponent of the airline ownership proposal on economic grounds, said it is appropriate to link the two in the security debate.
``One is as critical as the other -- these are critical infrastructure issues,'' LoBiondo said.
