Dodged the bullet.....this time.
http://www.thestreet.com/newsanalysi.../10326087.html
The Bush administration, facing strong Congressional opposition, has withdrawn a controversial proposal to reduce barriers to foreign ownership of U.S. airlines, but says it remains committed to the concept.
"It was clear from reviewing the comments that the [Transportation Department] needs to do more to inform the public, labor groups and Congress about the benefits of allowing more international investment," said Transportation Secretary Mary Peters, in a prepared statement.
Peters said the proposal, issued in 2005 and amended in May, would have provided U.S. airlines with more access to the world's capital markets.
She also reaffirmed the U.S. commitment to completing an Open Skies aviation agreement with the European Union. Talks have stalled because the U.S. has been unable to offer reciprocal access to international investment.
Meanwhile, a bipartisan group of members of the House Transportation and Infrastructure Committee welcomed the withdrawal of the proposal, saying it had threatened both national security and American jobs.
Democratic Congressman James Oberstar of Minnesota, the likely new chairman of the committee, commended Peters in a prepared statement "for choosing to do the right thing, in the face of strong pressure within the administration and from the European Union."
Added Frank LoBiondo, R-N.J., "Today's announcement is an acknowledgement that the consensus opinion of Congress was heard."
Limiting foreign ownership of domestic airlines like United, American and Continental (CAL - news - Cramer's Take - Rating) has long been a tenet of U.S. aviation policy, but the steady creep of globalization is calling the restrictions into question.
In November 2005, the DOT said it wanted to alter its rules, changing the interpretation of a provision of the law that governs "actual control" of a U.S. airline. While foreign investors would still have been limited to 25% of the voting stock, the change would have allowed foreigners to have "actual control" of the carrier and to make management decisions.
However, in June, the House voted by a better than 2-to-1 margin to attach language to an appropriations bill prohibiting the immediate implementation of the rule