US considers raising foreign ownership limits

[Dizel8]

November 2, 2005 The Bush administration wants to ease restrictions on overseas investment in US airlines, a move that could give struggling carriers a route for fresh capital and break the logjam in transatlantic aviation talks, industry sources said on Wednesday.
Airline industry officials who did not want to be named because it is a government initiative said the Transportation Department is preparing a plan that would ease the tightly scrutinized administrative regulation barring overseas investors from exercising control of domestic carrier operations in certain circumstances.
The administration will not, according to the industry sources with knowledge of the plan, propose any changes to the strict law that caps international investment at 25 percent of voting stock.
Congress has prevented any changes in current ownership regulations, with many lawmakers arguing that control of airlines is a unique component of the American business identity and necessary to ensure national security especially after the September 11, 2001, attacks.
Labor groups and their political allies have also fought hard to prevent ownership changes that they claim could undermine their jobs.
"We've seen dozens of industries from steel to autos to textiles go over the side as a result of globalization or allowing foreign entities to take them over," said Edward Wytkind, president of the AFL-CIO's transportation trades unit.
But US airlines could lose up to USD$10 billion this year, according to industry estimates. Three big carriers are in bankruptcy and face huge hurdles in raising cash to satisfy creditors and potential investors.
Aviation consultants said removing the limits on control might satisfy European negotiators at recently revived talks on liberalizing transatlantic aviation. Previous talks have foundered partly on European demands for greater access to US markets.
John Byerly, the deputy assistant secretary of state for transportation affairs, said the issue is not on the negotiating table. But he said the administration has been exploring options to increase foreign investment.
"It's a good thing to do for our own industry," Byerly said.
The two sides agreed last month in Brussels on key elements of a first-stage deal. The next round of talks is scheduled for the week of November 14 in Washington.

 

[OpenSkies]

This is good news. Hopefully a full open skies agreement will be forthcoming.

 

[General Lee]

I don't mind some extra capital brought in from foreign ownership. If you read the article, the max ownership would still be 49%, with 25% voting rights, and our government still will not allow foreign airlines to fly over here.(in mass--like Easyjet setting up a base here)


Bye Bye--General Lee

 

[mynameisjim]

I don't mind some extra capital brought in from foreign ownership. If you read the article, the max ownership would still be 49%, with 25% voting rights, and our government still will not allow foreign airlines to fly over here.(in mass--like Easyjet setting up a base here)


Bye Bye--General Lee

Then what does this initiative change? If ownership remains at 49% and voting at 25%, how does that allow more foreign captial?

 

[General Lee]

Then what does this initiative change? If ownership remains at 49% and voting at 25%, how does that allow more foreign captial?

Sorry, it increases the ownership to 49%, from 25% I believe. More capital is better than no capital.


Bye Bye--General Lee

 

[Flying the Line]

This is Retarded...The US won't let some airline mergers happen due to anti-trust concerns but apparently it is OK for foreign entities to own the airlines.

 

[Cpt. Underpants]

Just my 02c...

As most American managers are clearly incapable of running airlines efficiently and at a profit (ensuring job security and steady income) then what exactly is so bad about letting talented, rich foreign companies own and run the airlines for you? It will mean growth, advancement, foreign access, shiny new jets and jobs...is this bad? I'm not talking about the easyjets or ryanairs here, but class acts like BA, AF/KLM, SQ and CX.

Don't be so xenophobic...we are all supposed to be discoverers, so open your mind a little.

 

[typhoonpilot]

Just my 02c...

As most American managers are clearly incapable of running airlines efficiently and at a profit (ensuring job security and steady income) then what exactly is so bad about letting talented, rich foreign companies own and run the airlines for you? It will mean growth, advancement, foreign access, shiny new jets and jobs...is this bad? I'm not talking about the easyjets or ryanairs here, but class acts like BA, AF/KLM, SQ and CX.

Don't be so xenophobic...we are all supposed to be discoverers, so open your mind a little.

And since "Keep Discovering" is Emirates motto, let's not forget them either .


TP

 

[Rez O. Lewshun]

Get a perpsective! How does this impact pilots!

Please provide a comparative analysis on the maritime industry and the airline industry. Why are there very limited martime frieghters with US Citizen captains, officers and crews. Why are there no maritime ships registered in the US?

If it is ok the foreign ownership be changed from 25% to 49% today, then will it be ok later to change it to 50+%.

If foreign ownership at 50+% means foreign control, and management controls hiring, who will they hire? Who are they obligated to employ?

If a foreign entity controls an airline operating inthe US, must they use US registered aircraft? If they can't can they lobby to change the legislation?

Two of many reasons in our favor... CRAF and national security.


Maybe the demise of the Air Line Pilot profession will occur faster than we think. In less than 10 years we could be finished.


If we don't even understand what is going on how can do a thing to stop it... The people that want to change the ownership laws...do not care about us as Air Line Pilots. They don't care who fills the flight deck seats.

All of this will be determined on CapHill.

Prediction: in a couple of years the impact of this will hit HARD! Pilots will be taking thier bus tours to Washing DC to rally for support. By then it will be too late as the train will have already left the station....


Get informed. Get educated. Get involved! now

 

[furloughfodder]

Gotta love Bush!

LET THE OUTSOURCING OF AMERICA CONTINUE!!! (Ok so this is a little different than outsourcing...but...)

I POROMISE in the next 3 years you will see foreign national pilots outsourced/domiciled overseas working for US Legacy Airlines flying a significant portion of the international routes. Mark my words.

Thanks George!

 

[Cpt. Underpants]

typhoon

...with memories of 9/11, Korea and WW2 still fresh in the minds of many Americans, I think you can safely rule out any ownership by our Arab, Chinese or Japanese brethren!

 

[Dizel8]

I POROMISE in the next 3 years you will see foreign national pilots outsourced/domiciled overseas working for US Legacy Airlines flying a significant portion of the international routes. Mark my words.

Well, I think it might be more than three years, although not by much, but I think you are correct.

We are looking at potential changes in the ownership laws, open skies agreements, not to mention cabotage which has already been approved for flights in and out of PANC, although cargo only.

This isn't about what is best for US pilots, it is about what is best for business and the almighty dollar. If NWA managements proposal, with regards to outsourcing F/A's on international flights, is any indications, those that count the dollars have already given this some serious thought.

 

[Clyde]

Gotta love Bush!

LET THE OUTSOURCING OF AMERICA CONTINUE!!! (Ok so this is a little different than outsourcing...but...)

I POROMISE in the next 3 years you will see foreign national pilots outsourced/domiciled overseas working for US Legacy Airlines flying a significant portion of the international routes. Mark my words.

Thanks George!

Who was it that got the ball rolling with NAFTA?? Oh yeah, Clinton. I think you should thank slick Willy. While you're at it, quit blaming the Presidency for your own executive's incompetentcy.

 

[Dizel8]

Well, who gave us CAFTA??

The sooner we realize, that in most cases they are equally bad, the sooner we can work on getting some changes.

But Clyde, if you think President Bush gives a rodents rear about you on this issue, please give him a call and tell him we are a bit worried. Who knows, if he is unlike most politicians, you might be able to pry him away from the money trough

 

[Clyde]

Well, who gave us CAFTA??

The sooner we realize, that in most cases they are equally bad, the sooner we can work on getting some changes.

But Clyde, if you think President Bush gives a rodents rear about you on this issue, please give him a call and tell him we are a bit worried. Who knows, if he is unlike most politicians, you might be able to pry him away from the money trough

I challenge you to name one politician from any political party who would be more influenced by yours and my needs over money.

It is not the Presidency that outsources work, that decision is made by the corporations. Some politicians make that easier than others. If they don't, the execs just shut operations down here in the U.S. and move it elsewhere.

But, not all is doom-and-gloom. Some jobs are shipped overseas, while others are shipped here and in a lot of cases pay better. Ask former textile workers in the south who are now working at BMW plants.

Sometimes the glass is half full too.

 

[Dizel8]

Clyde,

"I challenge you to name one politician from any political party who would be more influenced by yours and my needs over money."

We totally agree, so please, let's not turn this into a political discussion, although it certainly is politics at work. As for your comment, that they would simply move the plant out of the US, fine, tax the product as it reenters the US. Of course, NAFTA and now CAFTA removes those import taxes, which in turn makes prodution outside the US cheaper. We will not get into how they avoid paying taxes in general, by maintaining offhsore accounts.

This has more to do with the future of the airline business in the US in general and us employees in specifics. Whenever a politician or a CEO starts talking about how things will be better if only you give me this, then it is time to start running in the other direction.

In general, it is not the US clamoring to get open skies, it is the EU and in particular BA/VA. They desperately wants more access to the US, since we are by far the biggest market. There is one airport, and one airport only, in the EU that US carriers really wants access to, LHR. Are we going to open US skies to the EU simply for 20 or 30 more slots at LHR? I certainly hope not, since to me that equates to buying Manhattan for a few pearls.

Further, I should mention, that not to long ago, UPS and FedEx were foaming at the mouth, upset about the DHL-Deutsche Post debacle, yet now UPS/IPA are willing to consider open skies and foreign ownership . Perhaps, just perhaps, the UPS IPA pilots should start thinking, that with the new contract, which they certainly deserve, are going to very highly compensated, more so than probably all foreign freight carriers. Sure, they have a contract that forbids outsourcing, yet the Menlo story continues to unfold. FedEx really is in the same boat.

So I guess, all of us, freight and passenger, are in this one together!

 

[Rez O. Lewshun]

So can we do much about it or are we going to sit around and watch it unfold. can we get organized? Can we get effective in Wash DC.

Does anyone have any solutions?

 

[Dizel8]

I haven't the foggiest, but here is an issue where ALPA/IPA/APA etc. probably should let their voice be heard, one way or another.

If you want to march at Washington, just say when!

 

[JohnDoe]

Seems like the word needs to get out big time. Start by talking to everybody in the "industry" that you can. Some may not even know it is up for debate again. Get them to do the same. Everybody calls their reps in DC to let them know they need to vote no. I've even asked family members to call/write reps.

As far as ALPA goes, it seems like they are pretty quiet on the issue this time around. Maybe I'm just not seeing it, but I would think they would be all over this.

 

[Flying the Line]

Onboard gambling may lead to free flights on Ryanair

By Michael Harrison, Business Editor

Published: 03 November 2005



Passengers on Ryanair could one day fly for free if revenues from onboard gambling and other services end the need for it to charge fares, the chief executive of the airline has predicted.
Michael O'Leary said Ryanair, the second biggest international carrier in the world, gave away about a quarter of its seats last year and that figure could rise to 50 or even 100 per cent depending on how successful in-flight gaming proved.

The Dublin-based airline hopes to launch a gambling service in the next 12 to 18 months, provided it can devise a payment system that allows it to debit a passenger's credit card before the plane lands.
Passengers will be able to gamble using either their mobile phones or Blackberries supplied by Ryanair. All the calls would be routed through an onboard mobile "sub-station" enabling Ryanair to get a cut of the call charge as well as a percentage of the takings.

He denied that Ryanair would taint the image of flying by turning aircraft into gambling dens which would be unsuitable for families with young children.
"The flag carriers have been ripping us all off for the last 40 years," Mr O'Leary said. "The image of airlines today is high-cost, rip-off, poor food. I don't see how onboard gambling could make that worse."

Mr O'Leary lashed out at those who criticised Ryanair's flight give-aways for fuelling the rise in aircraft carbon emissions.
He said: "We want to annoy the f****** whenever we can. The best thing we can do with environmentalists is shoot them. These headbangers want to make air travel the preserve of the rich. They are Luddites marching us back to the 18th century."
_____________________________________________________

This is ridiculous..If Ryanair is olny about money then they should get into another business. There are still many great US airlines that provide a service and also provide a great career to their employees. We do not need this kind of airline or its management in the United States of America.

 

[FlyBoeingJets]

Further, I should mention, that not to long ago, UPS and FedEx were foaming at the mouth, upset about the DHL-Deutsche Post debacle, yet now UPS/IPA are willing to consider open skies and foreign ownership . Perhaps, just perhaps, the UPS IPA pilots should start thinking, that with the new contract, which they certainly deserve, are going to very highly compensated, more so than probably all foreign freight carriers. Sure, they have a contract that forbids outsourcing, yet the Menlo story continues to unfold. FedEx really is in the same boat.

So I guess, all of us, freight and passenger, are in this one together!

Dizel,

Been giving this one some thought. If cabotage were allowed, would it be cargo or pax? I think it will be cargo first. (In the U.S., its already a reality in Alaska) It is less politically risky. No one cares if there is a "danger" to their package by it being carried by Chinese pilots. Isn't UPS chartering at least a flight a week on a Chinese freighter to Kentucky? The menlo thing is also another nose under the tent.

There is also no worry about the U.S. cargo transportation system. We have enough carriers to do that without FedEx and UPS. The U.S. military contracts with Evergreen, Atlas, Polar, Gemini, World, etc. FedEx is only a small fraction of the lift. (<5%). I'm not counting the mail contract. UPS doesn't even play in military contracts, last I checked, because they are allergic to hazardous cargo.

The mail contract will help keep revenue up at FedEx or at UPS if it changes hands. As long as the revenue keeps coming there will be an uneasy truce between management and pilots at these two, IMHO. If one angers their pilots the other will clean up. And the showdown with DHL/Astar appears to be almost 5 years in the future, if it comes at all. Basically not even a consideration due to the distance. FedEx and UPS want open skies because hey would expand more in Europe than DHL would expand here, so the thinking goes. I wonder if they are selling us beachfront property with that claim. Open skies would give FedEx and UPS at least a chance to compete with DHL in Europe as DHL is starting to compete with us in the CONUS.

 

[Rez O. Lewshun]

Seems like the word needs to get out big time. Start by talking to everybody in the "industry" that you can. Some may not even know it is up for debate again. Get them to do the same. Everybody calls their reps in DC to let them know they need to vote no. I've even asked family members to call/write reps.

As far as ALPA goes, it seems like they are pretty quiet on the issue this time around. Maybe I'm just not seeing it, but I would think they would be all over this.

ALPA has thier political action committee. It is not funded by ALPA dues. This is where the research and lobbying is done to push the issues of Air Line Pilots.

ALPA is well aware of the situation. However, are the pilots? It is hard to heard when most don't know or don't care. The AMR pilots have a political action committee too....

Percentage of participation and volume are two things.....

As an Air Line Pilot can you sacrifice a beer a month? Five bucks? Many Air Line Pilots give hundreds of dollars a year to political action committees. They understand that you take care of the people who take care of you....

There are plenty of myths and a total lack of understanding on giving money to political action committees.

Many think by supporting ALPA-PAC they are supporting non aviation issues..wrong.

The more support we give to help the DC players who are helping us the more effective they will be.

At a minimum, don't be ignorant on the issues. Get informed.


Here is an excellent article on the current martime industry and its anarchy state. It is written by the son of the author of Stick and Rudder. Read this article for a glimpse into the possiblilty of what is in store for us...

http://www.wesjones.com/anarchy.htm

 

[Clyde]

Clyde,

"I challenge you to name one politician from any political party who would be more influenced by yours and my needs over money."

We totally agree, so please, let's not turn this into a political discussion, although it certainly is politics at work.

Dizel8,

Agreed, let's steer it back away from politics. I was afraid it was on track for going deep in that direction too.

Also, I agree with you that pax and cargo pilots are all in this together too.

 

[Clyde]

Dizel,

Been giving this one some thought. If cabotage were allowed, would it be cargo or pax? I think it will be cargo first. (In the U.S., its already a reality in Alaska) It is less politically risky. No one cares if there is a "danger" to their package by it being carried by Chinese pilots. Isn't UPS chartering at least a flight a week on a Chinese freighter to Kentucky? The menlo thing is also another nose under the tent.

There is also no worry about the U.S. cargo transportation system. We have enough carriers to do that without FedEx and UPS. The U.S. military contracts with Evergreen, Atlas, Polar, Gemini, World, etc. FedEx is only a small fraction of the lift. (<5%). I'm not counting the mail contract. UPS doesn't even play in military contracts, last I checked, because they are allergic to hazardous cargo.

UPS is in the CRAF program, and is able to do militay charters when needed.

The cabotage with regards to cargo could be good or bad depending on how you look at it. A foreign airline who regularly flies cargo between Europe and the U.S. may be allowed to further continue to more airports from it's original destination. They wouldn't necessarily be taking over "hub-and spoke" routes, but nonetheless, they would be flying something that a U.S. carrier could potentially have flown.

On the flip side of the coin, there could be opportunities for U.S. airlines to fly more routes overseas. Currently, some of our flying isn't done by us because of European restrictions and regulations. With the advent of Open Skies, that could open up a tremendous amount of flying for U.S. carriers who currently cannot fly into certain markets because of European laws and regulations.

Personally, I do not see a major threat to either the pax or cargo side. People are still going to fly U.S. airlines because of their good reputation and safety record. I don't think that we would see foreign airlines competing with U.S. airlines on domestic travel routes. At best, someone like Air France may be allowed to continue a flight from JFK to LAX, but I don't think we will see them offering high frequency service between U.S. airports.

 

[Regul8r]

Not a Good Idea

Is it safe to assume that US Pilots make more than their foreign counterparts at the majors? What's to keep foreign investors from asking US Operators to reduce their pilot pay scales before they inject fresh capital? It's all about the money here folks and in order to keep costs down (Near the world wide average) they will need to bring pay scales down in accordance as well. Correct me if I am wrong here, but isn't this what is happening in alot of US Industries i.e. auto? There's no foreign investment from abroad in the US auto industry (Ford, Delphi, GM) but the main driving force behind these pay cuts are the investors and financial backers and it's all in the name of competition. I'd say before any forign investors consider pouring money into a US Airline, they'll ask that labor either be outsourced or costs slashed.

 

[FlyUnited]

All one needs to do is log onto FlyerTalk to see that people love the foreign carriers. They would indeed fly them if they had the opportunity. This is very bad for Americans.

 

[Regul8r]

This is very bad for Americans.

Thanks United, I agree.

 

[Rez O. Lewshun]

Dizel8,

Agreed, let's steer it back away from politics. I was afraid it was on track for going deep in that direction too. .

Huh? It is all about politics!!! Not about whose party is better, but the political issue!!!!

Everything that is determined that concerns out careers/jobs is decided politically on CapHill!!!


http://www.opensecrets.org/pacs/lookup2.asp?strId=C00035451

 

[fokkerjet]

typhoon

...with memories of 9/11, Korea and WW2 still fresh in the minds of many Americans, I think you can safely rule out any ownership by our Arab, Chinese or Japanese brethren!

It really worked with the auto industry, you can see that nobody buys any Chinese or Japanese vehicles because memories of the Korean War and WWII..... What about the aircraft business; good people fought and died in Germany but we seem to want Airbus to build our next Air Force tanker............

 

[Regul8r]

I agree with Fokker, it's all about the Benjamin's here. US Management wouldn't bat an eyelash at sending the US workforce up Sh!t-creek if it made the bottom line look a little bit better.