Says Agency Is Still Committed To Open Skies Plan

ANN REALTIME REPORTING 12.05.06 1115 EST: In something of a surprise move, US Transportation Secretary Mary E. Peters announced Tuesday the DOT is withdrawing a proposal that would have changed rules governing international investment in US airlines after reviewing a multitude of public comments, including those received from Congress. The Secretary also re-affirmed the US commitment to completing a market-opening aviation agreement with the European Union.

"It was clear from reviewing the comments that the Department needs to do more to inform the public, labor groups and Congress about the benefits of allowing more international investment. We need a stronger national consensus about the best means of achieving that objective," said Peters. 

The original proposal, first issued by the Department in November 2005 and later amended in May 2006, would have allowed international investors more input in the marketing, routing and fleet structures of US airlines while retaining current domestic ownership and labor protections.

As Aero-News has reported, that proposal met with a strong backlash from lawmakers, as well as cash-strapped domestic airlines. US Airways, Delta, and United had supported an easing of restrictions on foreign ownership; more solvent carriers, such as Continental, fought to keep the regulations as they were.

Disagreement over the ownership issue has held up implementation of the so-called "Open Skies" agreement reached between the US and European Union in 2005.

 Peters also said the Department remains committed to seeking an Open Skies aviation agreement with the European Union. And while she noted the investment proposal was not directly linked to such an agreement, she acknowledged that some involved with the European negotiations had aligned the two.

Saying that "today’s announcement in no way deters us from our goal of giving US airlines complete access to the world’s capital markets," Secretary Peters said the DOT was eager to work with Congress and the aviation industry to find new ways to make it easier for airlines to raise money from global investors.

"Nobody doubts the benefits to travelers, airlines and our economy of making it easier to fly to and from Europe," Peters said.

FMI: www.dot.gov