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Continental Airlines says D.O.T. proposal on foreign control of U.S. airlines ignores congress

Continental Airlines said that the U.S. Department of Transportation (DOT) proposal to allow foreign control of U.S. airlines…

Continental Airlines said that the U.S. Department of Transportation (DOT) proposal to allow foreign control of U.S. airlines is a blatant attempt to circumvent the law that the DOT has been unable to convince Congress to change.

Less than two years ago Congress made its statutory ban on foreign control even more restrictive by forbidding any actual control of U.S. airlines by foreign citizens. Nonetheless, DOT is attempting to gut the definition of actual control despite the clear Congressional intent to bolster it and to ensure only U.S. citizens can control U.S. airlines.

This attempt to change the law outside the legislative process will not withstand judicial scrutiny, and the uncertainty over its legitimacy will discourage the very investment the DOT is trying to encourage.

Continental believes that the foreign ownership restrictions should be reviewed and encourages a debate of all reasonable viewpoints on foreign control of U.S. airlines, but that debate should be heard in the chambers of Congress.

DOT proposes to unilaterally limit the application of the law to only certain aspects of airline management, while the statute requires that U.S. citizens have actual control over all aspects of airline operations, a Continental spokesman said. This shows that either the DOT has misinterpreted the law or has ignored the realities of internal airline management and how airlines operate. Actual control over day-to-day operations, including scheduling, pricing, employment and labor decisions and financing, provides foreign citizens actual control of the very areas DOT is trying to carve out. Airline operations cannot be split in the manner DOT is suggesting.

The foreign control proposed by DOT is also tantamount to allowing foreign airlines to operate domestic flights within the U.S., Continental said, which is clearly prohibited by U.S. aviation law. Any attempt to change this law is also the responsibility of Congress.

Continental said the DOT proposal is intended to satisfy the European Union that its citizens will be allowed to control U.S. airlines. DOT seems blinded by the desire to finalize a U.S.-E.U. aviation agreement that does not provide true open access for U.S. carriers and DOT therefore has hastily committed to this proposal, as it has been unable to convince Congress to even consider a change to the current statute. European control of U.S. airlines has been demanded by the E.U. as a prerequisite to a new aviation agreement, Continental said. U.S.-E.U. negotiations are scheduled to resume on November 14 in Washington.

Continental agrees with the DOT objective to assist airlines and calls on DOT to focus on the true fundamental problem — the excessive tax, fee, and regulatory burdens placed on the airlines and their customers by the U.S. government and runaway fuel costs. Changes in these areas will do more to attract airline investment than this proposal could possibly achieve. The DOT`s immediate and limited policy objective of reaching a new agreement with the E.U. does not justify ignoring U.S. law or terminating the continuing public debate on this issue.

Congress should carefully consider and debate all aspects of foreign control, including the serious and far-reaching effects on U.S. jobs, national defense, homeland security and the future of the U.S. airline industry.

Continental also urged the Congress to require the DOT to withdraw its proposal to avoid erosion of confidence in U.S. law while the debate over foreign control continues in Congress. The DOT`s end run around Congress could seriously jeopardize the legitimacy of the aviation laws, Continental said.

Theodore Koumelis
Co-Founder & Managing Director - Travel Media Applications | Website

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.