Congress clears block to airline investment plan

By John Crawley

WASHINGTON (Reuters) – Congress has agreed not to hold up a
Bush administration proposal aimed at attracting foreign
investment to U.S. airlines, despite security concerns among
some lawmakers, officials said on Thursday.

Lawmakers negotiating emergency war spending and hurricane
relief legislation have agreed to drop language from a bill
that stipulates delaying the airline proposal for a year, House
and Senate aides said. The language was the central obstacle to
the proposal.

The decision cleared the way for the Transportation
Department to finalize the change as early as this summer. It
also keeps on track a tentative aviation agreement between U.S.
and European Union negotiators to further open up transatlantic
service.

A spokesman for the agency said transportation planners
will “continue to move forward” with the proposal, which was
introduced last November and updated several weeks ago to
address congressional concerns.

The ownership law limits overseas investment to a maximum
of 25 percent voting stock and little or no foreign influence
on operating decisions, conditions that have discouraged
foreigners from taking an interest U.S. carriers over the
years, with a few exceptions.

The Transportation Department and other proponents say
changing the restrictions on control are overdue to help an
industry where four big airlines have fallen into bankruptcy
since 2002 and high costs and losses continue to define much of
the business.

They contend that giving foreigners influence over pricing,
scheduling, fleet plans and other operating issues for their
stake of up to 25 percent could expand the pool of investors in
U.S. airlines, introduce new competition and enhance
partnerships.

Previous attempts to ease the restrictions have withered on
Capitol Hill and current congressional objections centered on
national security concerns, which were sharpened by the Dubai
Ports controversy this year.

Some lawmakers also objected to the potential impact
foreign investment would have on labor unions and American jobs
in general.