US Congressman Dave Brat (R-Virginia) has introduced a bill that would increase the caps on foreign ownership of US commercial airlines from the current 25% to 49%.
According to Brat, the current limits hinder investment in US carriers which then increases the cost of capital and limits consumer choices. The Bill would, therefore, allow at most 49% of a US airline's equity, board, and voting rights to be controlled by non-US nationals. Aside from increasing foreign ownership caps, the Free to Fly Act would also require any foreign US airline subsidiaries to be established and regulated under US law, be based in the United States, and only employ American workers.
“The elimination of this outdated restriction is long overdue," Brat said. "As an economist, I understand that hindering investment hurts American businesses, workers, and consumers. The Free to Fly Act would stimulate and expand the travel and tourism industry, creating more choices and reducing prices for consumers, while at the same time increasing financial stability for US airlines and creating jobs for American workers."
The Bill is currently due to be scrutinized by the Committee on Transportation and Infrastructure, in addition to the Committee on Armed Services.
Neighbouring states Mexico and Canada have already taken significant steps to liberalize their respective limits on foreign participation in locally-based airlines with both eyeing a 49% ownership cap up from 25%.
