The head of the U.S.‘s largest airline pilot union told Congress that loosening the Department of Transport rules on overseas control of U.S. airlines violates federal law.
They have also said that it usurps Congress’ authority in setting such policies, and strikes another blow against airline workers.
“DOT’s proposed rule essentially rewrites the statutory rule on ‘actual
control’ enacted by Congress,” said Capt. Duane Woerth, president of the Air
Line Pilots Association, Int’l (ALPA). “Changes of this magnitude should be
undertaken not by an administering agency but by the legislative branch.”
Woerth was testifying at hearings by the House Aviation Subcommittee on a
proposed DOT rule change that would radically reduce controls that prevent
foreign owners from dictating a carrier’s business practices and policies. In
addition to raising a number of technical and economic policy concerns, Woerth
stressed the effect that the rule change would have on airline workers.
“Pilots spend their entire careers accumulating the seniority required to
gain access to (international) flying opportunities. In an era when the career
expectations of pilots and other airline workers already have been repeatedly
frustrated by airline bankruptcies, furloughs, wage concessions, pension plan
terminations, and the like, it would be a crowning blow for the U.S.
government now to adopt a policy that would tend to eliminate international
flying by U.S. carriers,” he said.
Under the new rule, an airline would only have to meet standards in four
relatively minor areas to remain in compliance with the statute prohibiting
foreign control: corporate documentation, participation in the Civil Reserve
Air Fleet program, TSA security regulations, and FAA safety regulations. All
other aspects of airline operations, including prices, scheduling, markets,
fleet structure, marketing, and alliances, could be controlled by foreign
investors, including a U.S. carrier’s foreign airline competitor.
Woerth said that such a departure from current standards amounts to having
an executive agency rewrite federal law, and proceeded to methodically outline
a series of major objections to the proposal:
- It violates federal law prohibiting foreign control
- A foreign airline could change a U.S. carrier’s schedules, pricing,
etc., to feed its own international operations, to the detriment of the U.S. carrier and it employees
- For similar reasons, the U.S. carrier’s ability to furnish aircraft
suitable for the U.S. military’s CRAF program could be reduced
- U.S. workers might not have the same labor law protections that are
available in the U.S. if a foreign owner began to play them off against
workers in a different country
- Aviation safety could be reduced because the proposed rule only requires
that foreign-controlled management meet minimum FAA standards, whereas
the enviable safety record of U.S. carriers is the result of voluntary
participation in programs and practices that go well beyond minimum
- Because of a provision in many bilateral aviation agreements, any U.S.
airline under foreign control could be disqualified from providing
service under those agreements
- The DOT has not demonstrated a need for foreign investment in U.S.
carriers, nor has it shown that investment will not occur absent such a
Woerth also criticized concessions made by U.S. trade negotiators in the
recent talks with the European Union. Citing a June 2004 report from the U.S.
Government Accountability Office on the effects of easing restrictions on
U.S.-European Markets, he noted that the GAO concluded that whatever benefit
U.S. carriers and consumers would eventually gain from such an agreement might
not be realized for several years.
This, according to the GAO, is because the U.S. already has open access to
the vast majority of European traffic and the only significant restricted
market—London—is subject to significant airport capacity constraints
that would not be eliminated by a liberalized agreement. “In other words, in
the GAO’s view, U.S. carriers were not likely to benefit in the short term and
possibly only to a small extent even in the longer term by a US-EU ‘open
skies’ agreement similar to the initialed text,” Woerth said.