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Oberstar & LoBiondo Praise DOT Move on Airline Ownership Rules

Location: Washington, DC

Oberstar & LoBiondo Praise DOT Move on Airline Ownership Rules

Led by Reps. James L. Oberstar (D-Minn.) and Frank A. LoBiondo (R-N.J.), a bipartisan group of Members of the House Transportation and Infrastructure Committee today welcomed word that the Department of Transportation was abandoning its attempts to change federal rules on foreign control of U.S. airlines. Jerry F. Costello (D-Ill.) and Ted Poe (R-Tex.) also joined Oberstar and LoBiondo in being vocal opponents of the plan.

"I am very pleased at today's news," said Oberstar, Ranking Democratic Member and likely next Chairman of the full Committee. "I commend Transportation Secretary Mary Peters for choosing to do the right thing, in the face of strong pressure within the Administration and from the European Union. She deserves our thanks."

"I want to commend Transportation Secretary Peters for making the right decision to protect America's security and economic interests. The strong bipartisan view of Congress continues to be that 65 years of precedent should not be carelessly reversed. Today's announcement is an acknowledgement that the consensus opinion of Congress was heard," said LoBiondo, a Member of both the House Aviation Subcommittee and the House Armed Services Committee. "I also want to thank my colleagues, in particular Congressman Oberstar, for joining me in standing up to protect our nation's critical infrastructure."

"The Secretary has made a good decision to withdraw this proposal. I am strongly opposed to this rule and this is a decision that should not be made unilaterally by the Department of Transportation, as it has important ramifications for our nation's aviation security and American workers, said Costello. Forcing this decision on the Congress and the American people would have set the wrong tone heading into next year, and I look forward to working with the Secretary on FAA reauthorization and a variety of other issues."

Costello is in line to chair the Aviation Subcommittee in the new Congress.

"I thank Secretary Peters for realizing that allowing the rule despite Congress' overwhelming opposition violates the will of the people and the Congress who represents them," said Poe, a Member of the Aviation Subcommittee. "It is a homeland security risk that we should not take."

Long-standing aviation law limits foreign investment in U.S. airlines to 25 percent and requires "actual control" to be in the hands of U.S. citizens. The Department announced earlier this year that it was going to allow foreign investors more operational control by changing its interpretation of the law. Under the DOT proposal foreign interests would have been allowed to control all airline commercial decisions, including routes served, fares and aircraft purchases.

Members of Congress, led by Oberstar, Costello, LoBiondo, and Poe, protested the plan. In June, the House voted 291-137 to attach language to its transportation appropriations bill to prohibit the immediate implementation of the new rule.

By late summer, it appeared that DOT was backing away from the rule change, but there were indications in recent weeks that the effort had been revived. The four Members promptly wrote to White House Chief of Staff Josh Bolten, renewing their protests.

The Members objected to the rule change on two fronts: They said the move would foreign investors—even foreign governments—control over one of the nation's most visible and prestigious industries, and they objected to the Department trying to change a decades-old federal law through the rulemaking process, instead of through legislation.

The change had been sought by the Europeans as a prerequisite for a new open-skies trade agreement between the United States and the European Union.

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