Continental Airlines Chairman and Chief Executive Officer Gordon Bethune today called for relaxation of restrictions on foreign ownership of U.S. airlines as the aviation industry faces a potential new round of consolidation. Bethune also pressed Continental`s case for entry into Heathrow.
Speaking to the Aviation Club of the U.K. at the Institute of Directors, Bethune said that artificial barriers to global investment are contrary to the economic interests of developed and underdeveloped economies alike.
“Consolidation in the airline industry may or may not be imminent,” Bethune said, “but it does seem to be inevitable.”
“Network-oriented industries such as transportation and telecommunications require enormous capital investment and worldwide connectivity, and these network businesses must constantly evolve to meet the changing needs of the global marketplace,” Bethune said. “Unfortunately, airlines are uniquely handicapped because outdated laws limit their access to the foreign equity markets and prevent them achieving true global networks, which customers demand.”
As a result of existing antiquated barriers, airlines have not reached their true value to investors or travelers and employment opportunities have been artificially constrained, because modernization and expansion opportunities are limited by the scarcity of investment capital.
Bethune said that his appeal for relaxed foreign ownership restrictions should not be heard as a call for cabotage, which Continental is not advocating. (Cabotage is the practice whereby airlines of one country are permitted to fly domestic flights within another country.)
“I am sure that dialogue about Open Skies will continue ad infinitum. However, international investors have Open Wallets today and would quickly take advantage of a new opportunity to participate in the economic globalization of aviation.”
“To successfully compete for the long term on the world stage, U.S. airlines need to have the same ability that exists in other businesses that must globalize their capital structure and networks to meet the demands of the global economy,” Bethune said.
Continental Airlines (http://www.continental.com), the world’s sixth largest airline, operates more than 2,200 flights daily to 135 U.S. and 89 international destinations. In Europe and the Middle East, Continental serves 17 cities in 11 countries, operating 168 departures weekly to its U.S. gateway hubs at New York/Newark, Houston and Cleveland, with onward connections to cities throughout North America, Latin America and the Caribbean. For the third year running, Continental`s BusinessFirst was voted Best Transatlantic Business Class among U.S. airlines in Condé Nast Traveler magazine’s 2000 Business Travel Awards poll. Continental’s alliance carriers in Europe include Air France, Alitalia, British Midland, CSA Czech Airlines, KLM Royal Dutch Airlines and Virgin Atlantic Airways.