Should the US relax foreign ownership rules for domestic airlines?

22 March, 2018

The US applies one of the most restrictive regimes for foreign ownership of airlines of any developed country. While there is a great deal of rhetoric surrounding the reasons for this, there has not been a great deal of empirical evidence that it is in the national interest - or even that of the incumbent domestic airlines themselves.

One argument sometimes raised is that in times of strategic emergency a largely foreign owned airline might not be available for national uplift. Pilot and other unions have been particularly strenuous in their opposition to increased foreign ownership. Here again there appears to be no generic reason for their resistance to change, other than unsubstantiated claims of the possibility of lower paid workers being introduced.

Meanwhile some US airlines have taken advantage of other countries' rules to acquire up to 49% of their national airlines in order to strengthen their market position.

But many questions remain...

  • How do the US foreign ownership rules compare with other countries?
  • What are the benefits of higher foreign ownership limits in the US market?
  • Would a more relaxed regime be a threat to incumbent airlines or existing airline employees?
  • If the US relaxed its rules, would that encourage more other countries to allow US investment in foreign airlines?

This will be one of the topic areas discussed at the forthcoming CAPA- Centre for Aviation Americas Aviation Summit that takes place in Houston, USA between April 16-17, 2018.

Understanding aviation markets is CAPA's great strength and passion and this year's agenda includes a variety of topics sure to generate interest. Should the US relax foreign ownership rules for domestic airlines? will be part of Session Three, entitled 'North America' and will take place on the afternoon of 16-Apr-2018.

The high-level Americas Aviation Summit is a forum for debate and discussion of strategic issues facing the region's aviation industry and it is attracting airline and travel industry CEOs from across the Americas region, Asia, Europe and the Middle East.

It is a key time in the United States as it approaches the next generation of aviation. As consumer demands change rapidly, as infrastructure needs remain unsatisfied, and as longstanding policies are under attack, the US airlines are unprecedentedly profitable. There is much that needs to be fixed if they are not to be marooned in the present, domestically and internationally.

FIND OUT MORE... visit the CAPA Americas Aviation Summit homepage to find out more about this not-to-be-missed opportunity to discuss relevant issues impacting the US aviation sector and learn meaningful insights from your industry peers.