Airline Competition: Impact of Changing Foreign Investment and Control Limits on U.S. Airlines
RCED-93-7
Published: Dec 09, 1992. Publicly Released: Jan 08, 1993.
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Highlights
Pursuant to a congressional request, GAO provided information on the current restrictions on foreign investment in and control of U.S. airlines, focusing on the impact of relaxing restrictions on: (1) domestic and international competition, (2) national security, (3) airline employment, and (4) safety. GAO also reviewed the Department of Transportation's (DOT) procedures for enforcing these restrictions.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| If Congress chooses to relax the limits on foreign control of U.S. airlines, it may wish to consider limiting eligibility for greater investment and control of U.S. airlines to investors from countries that are willing to exchange improved access to their aviation markets for greater opportunities to invest in U.S. airlines. |
Closed – Not Implemented
|
The Commission on Airline Competition's report, issued in September 1993, had recommendations in this area, which were consistent with GAO's recommendation. Although congressional consideration of this matter was anticipated, no action has been taken or is presently contemplated. |
| If Congress chooses to relax the limits on foreign control of U.S. airlines, it may wish to consider limiting eligibility to foreign investors that are not subsidized by foreign governments. |
Closed – Not Implemented
|
The Commission on Airline Competition's report, issued in September 1993, had recommendations in this area, which were consistent with GAO's recommendation. Although congressional consideration of this matter was anticipated, no action has been taken or is presently contemplated. |
| If Congress chooses to relax the limits on foreign control of U.S. airlines, it may wish to consider modifying the scope and timing of the DOT review process to ensure that potentially harmful investments are prevented by: (1) giving DOT authority to review investments before they are made final and to prohibit investments that fail to meet the fitness criteria; (2) requiring DOT, in conjunction with its fitness review, to make explicit determinations under its separate statutory authority with respect to international aviation competition; and (3) requiring that DOT consider potential national security impacts of foreign investments in U.S. airlines in consultation with DOD. |
Closed – Not Implemented
|
Action on this recommendation depends on action taken on the previous recommendations. |
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Topics
AirlinesAirline regulationCompetitionForeign investments in USInternational economic relationsInternational travelInvestments abroadTransportation safetyForeign investmentsAircraft acquisition program