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BA urges US to scrap ownership rules
British Airways chairman Martin Broughton has urged the US to free the aviation industry from a “regulatory straightjacket” and abandon the strict foreign ownership rules of its airlines.
Broughton, the new chairman of the Transatlantic Business Dialogue, told a gathering in New York it was time European carriers were allowed to take majority stakes in US carriers, many of which are struggling in Chapter 11 bankruptcy.
As part of ongoing aviation discussions with the EU, the US Government has proposed allowing overseas airlines a degree of managerial control over their US counterparts – but still denying them more than 25% ownership.
Broughton branded the move a “recipe for confusion”, designed to give the appearance of change while offering little value for EU carriers.
The department of transportation plan is said to offer foreign investors a greater say in commercial decisions. But as long as they remain 75% US-owned, little will change, said Broughton.
In contrast, he told an audience of aviation executives, the EU is offering 100% ownership and control of its airlines with no caveats as the basis of a new agreement.
“All it needs is a little courage,” he said. “[US] Congress can free the aviation industry from its straightjacket. Rather than fudging the issue why isn’t the US administration prepared to have an open debate with Capitol Hill about a proper legislative solution.
“The European aviation market currently has more attractive investment opportunities, it’s growing and most of the airlines are financially sound without resorting to state aid or Chapter 11.”
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