Airline Pilot Central Forums - FDX Practice Bid Rumors?

Thoughts? Well, somebody posted this a couple of days ago:

http://news.moneycentral.msn.com/tic...469&Symbol=UPS

WASHINGTON (AP) - The U.S. is proposing that dozens of countries ease their airline ownership rules in an effort to spur international investment in the industry, a State Department official said Tuesday.

The proposal would change restrictions in the current, mostly bilateral system that require airlines to be owned and controlled by nationals of the two participating countries. It also would facilitate consolidation among large carriers by providing them access to capital not limited by geopolitical borders, analysts said.

The U.S. alone has more than 100 such agreements, and along with similar ones in other countries, it creates "an incredible web of restrictions," John Byerly, Deputy Assistant Secretary of State for Transportation Affairs, said in a phone interview.

The U.S. already has agreed not to bar service from airlines in 10 European countries that are not members of the EU and some African countries. For example, the U.S. did not object to service by a Nigerian airline because it's owned and controlled by British nationals, which allowed the Transportation Department to approve flights to America by Virgin Nigeria, Byerly said earlier Tuesday.

The U.S. now wants to expand those efforts to more than 60 countries, perhaps more in the long run, as an "important step of investment liberalization," he said.

"The European Union and the United States should include a much expanded list of countries for which, reciprocally, each side will pledge to forgo existing rights to bar air services on the basis of the nationality clause," Byerly said in a speech in Brussels.

Michele Cercone, the EU Commission spokesman for transport issues, called the idea "quite interesting ... but we will have to see what will come out of it."

"Let's not forget, though, there will soon be a change in the U.S. administration," Cercone told The Associated Press. "We'll have to see how the new administration will want to face this issue."

If approved, the most immediate impact likely would be on domestic cargo carriers like United Parcel Service and FedEx Corp., that could opt to expand globally through acquisitions instead of organic growth. On the passenger side, U.S. carriers would have the option of investing in foreign carriers to grow their international framework, Byerly said.

The proposal would not change U.S. laws regarding foreign ownership of domestic carriers, which currently cap international investors to 25 percent of the voting stock and prohibit "actual control" by foreign citizens. The U.S. will keep an "open mind" on an expected EU proposal to ease those restrictions, but it will be a "tough case," for European officials to sell, Byerly told the AP.

The ownership rules have thwarted some deals in the past and the new plan would likely ease consolidation among network carriers by giving them border-free access to capital, said Daniel Petree, dean of the College of Business at Embry-Riddle Aeronautical University in Daytona Beach, Fla.

"Based on market forces, competitiveness and quality, it makes sense to ... closely mirror capital flows in and out of other industries," Petree said.

A spokesman for the International Air Transport Association said the trade group supported the proposal as an incremental step.

"This is a global industry that needs to be run like a global business," said Steve Lott. "It makes no sense that consolidation is limited to domestic partners."

Earlier Tuesday, Byerly addressed the European Aviation Club in Brussels before the second stage of U.S.-European Union air transport liberalization talks start Thursday in Slovenia.

How about this? They do SIBA for a couple of years instead of both FDAs. Wait to see if this deal goes through, then buy somebody like DHL. DHL does the CDG flying. Strike a similar deal with China, buy Jade Cargo and they do the CAN turns. Goodbye FDAs and SIBA, forever. Too far fetched? Maybe it is time to put Section 1 under the microscope.