Friday, December 01, 2006

Lawmakers warn White House on air ownership plan

Lawmakers warn White House on air ownership plan
By John Crawley

WASHINGTON (Reuters) - A bipartisan group of U.S. lawmakers led by an incoming Democratic committee chairman has warned the White House not to proceed with a proposal to ease restrictions on foreign investment in U.S. airlines.

Rep. James Oberstar, a Minnesota Democrat who will lead the House of Representatives Transportation Committee beginning in January, and three other House members suspect the Bush administration may be planning an end run around Congress and urged White House Chief of Staff Josh Bolten to withdraw the plan entirely.

"Making the rule final in the face of bipartisan congressional opposition would be a very poor start to the 110th Congress," Oberstar wrote in a letter to Bolten on Wednesday.

New Jersey Democrat Jerry Costello, the incoming chairman of the House aviation subcommittee, and Republicans Frank Lobiondo of New Jersey and Ted Poe of Texas also signed the letter.

The Bush administration proposal a year ago to reverse a World War Two-era law and give overseas interests say in how the carriers they invest in are run stalled in August when Congress voted to block any attempt to change ownership rules.

European Union negotiators want greater leeway for international airline investors before approving an agreement with the United States that would, among other things, give American carriers more opportunities for transatlantic service, including greater access to London's Heathrow airport.

But the congressional vote to delay U.S. action has no teeth yet because it was included in transportation spending legislation that will not be finished before lawmakers adjourn after the lame-duck session in December, and will not likely be addressed again until February at the earliest.

Oberstar now suspects the administration may try to exploit the congressional leadership change and the unexpected inaction on the spending bill to quietly finalize the investment proposal.

Oberstar and his colleagues said it was their understanding that transportation planners could act soon on the change that has some support among U.S. airlines. There is little to no foreign investment in U.S. carriers now.

Transportation Department officials would not discuss their plans for the rule they say could inject new capital into the U.S. airline industry and invigorate competition, lowering prices and improving service.

Andrew Steinberg, the agency's assistant secretary for aviation and international affairs, told a conference of airport executives on Thursday the administration was committed to more robust international aviation markets for U.S. airlines, especially in Europe.

"We must, whenever possible, reach global solutions," Steinberg said.

Daniel Calleja Y Crespo, the European Commission's air transport director, told the same conference that the Europeans are willing to wait longer for a U.S. decision. "We have to be a little bit patient and hopefully in coming months make progress."