The US has scrapped
proposals to offer foreign
investors a greater say in its
airlines, in a move which
throws an 'open skies' deal
with Europe into doubt. The US
government said, however, that
it remained committed to an
agreement with the EU to
liberalise transatlantic air
traffic.
Transportation Secretary
Mary Peters said the decision
to withdraw plans for a
greater foreign role in the
business operations of US
airlines was taken after
protests from the industry and
from Congress. The EU has
insisted that limits on
foreign stakes in US airlines
must go if a comprehensive
deal to deregulate
transatlantic air traffic is
to be achieved.
The two sides began
negotiations in October 2003
and last November hammered
out an agreement to allow
unrestricted competition by US
and EU airlines, opening the
prospect of cheaper tickets
and more choice for
passengers.
As part of the pact, the US
government offered to allow
foreign investors a bigger
role in the marketing, routing
and fleet structures of US
airlines. But in a lingering
sore point for the EU, the US
made clear its intention to
limit foreign voting rights in
its airlines to 25% of the
capital. The EU has a higher
ceiling of 49%.
Peters said the investment
proposal was not 'directly
linked' to an Open Skies
agreement, but acknowledged
that 'some involved with the
European negotiations had
aligned the two'.