EU pushes for relaxation in US airline ownership rules

EU pushes for relaxation in US airline ownership rules

The US is to be urged to relax tough foreign ownership rules in an attempt to trigger increased consolidation.

European Union transport commissioner Siim Kallas believes combined European and US airlines would be better able to compete with fast-expanding rivals in the Gulf and China.

“American and European carriers can together form a powerful alliance,” he told the Financial Times.

Consolidation would result in better capitalised groups that could afford the next generation of fuel-efficient aircraft.

But the main stumbling block is likely to the resistance from the US to the EU’s controversial emissions trading scheme.

Kallas described rules restricting foreign ownership in US carriers to 25% as a “relic”.

“There is a general assumption among all experts . . . that [airline industry] consolidation brings more capital desperately needed to renew [aircraft] fleets,” he said.

He suggested the US should at least be prepared to accept similar ownership rules to the EU, which allow non-European companies to own up to 49% of the voting shares of airlines in Europe.

The Commission believes mergers between EU and US carriers could act as a catalyst for global consolidation of the airline industry.



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