Posted on 06/04/2003 4:31:57 PM PDT by Willie Green
For education and discussion only. Not for commercial use.
The Bush administration is asking Congress to raise from 25 percent to
49 percent the permissible level of foreign ownership of a U.S.
airline's stock to give the airlines more access to foreign capital.
More liberalization of the world's air transportation systems would
ensure greater levels of global trade and economic growth, says Norman
Mineta, U.S. transportation secretary. The change of law would be
consistent with European Union (EU) airline ownership rules, he said.
Liberalization produces public benefits not possible under
"restrictive" regulations, Mineta told a meeting June 2 of the
International Air Transportation Association (IATA) in Washington.
Mineta also said a broad, multilateral or regional framework is needed
to replace the current "patchwork" of aviation agreements.
"Freedom [of airlines] to grow and compete should be at the heart of
every aviation agreement worldwide," he said
Mineta said liberalizing ownership rules -- provided there are clear
lines of responsibility for safety and security -- was the most
discussed issue at a meeting of the International Civil Aviation
Organization in March.
The secretary said he was confident that airlines will "turn the
corner" and recover from the economic troubles that have affected the
world aviation industry because of concerns about terrorism, the war
in Iraq and severe acute respiratory syndrome (SARS).
He said increasing the aviation industry's capacity is necessary to
avoid the type of congestion and delay problems that occurred in 2000.
Five percent of the world's gross domestic product (GDP) can be
attributed to aviation, he added.
Following is the text of Mineta's prepared remarks:
(begin text)
REMARKS FOR
THE HONORABLE NORMAN Y. MINETA
SECRETARY OF TRANSPORTATION
INTERNATIONAL AIR TRANSPORT ASSOCIATION [IATA]
WASHINGTON, D.C.
JUNE 2, 2003
Good morning. Thank you Leo Mullin for the kind words of introduction.
Director General Bisignani, it is a pleasure to join you, the Board of
Governors and the members and guests of IATA for your 59th Annual
General Meeting.
On behalf of President Bush and Vice President Cheney, I welcome you
to Washington D.C. I thank IATA for choosing the United States as the
host Nation and for choosing Washington DC as the host city in honor
of the Centennial of Flight.
One hundred years ago --- the Wright Brothers, one of our first
pioneers in air transportation --- set the world on a course that both
electrified our imaginations and revolutionized aeronautical theory
--- and we've never looked back.
Today, thanks in large part to the Wright Brothers and others, we live
in a global economy that moves with lightning speed 24 hours a day --
seven days a week. Air travel is critical to making that happen.
The World Bank estimates that the World Gross Domestic Product (GDP)
in 2001 was more than $31 trillion [$31,000,000 million] U.S. dollars.
Of that, nearly $1.4 trillion [$1,400,000 million] or 5 percent of
that World GDP can be attributed to aviation's impact on the economy.
But we live in a new world. The airline industry is facing some of its
most challenging times ever --- a slowed global economy, the aftermath
of 9/11 and the Iraq war, the threat of terrorism, and severe acute
respiratory syndrome --- SARS.
Together, these concerns have taken a collective toll on our economies
--- and the airlines that serve them.
Two weeks ago, IATA reported that, due to the Iraq war and the SARS
outbreak, world passenger traffic in April dropped by more than 18
percent over last year.
But let me say this: I am confident that aviation, the most vibrant
and resilient part of the global economy industry, will turn the
corner. And no one has been more critical to ensuring the continued
vibrancy and resilience of this industry than the men and women of
IATA.
IATA has worked hard to foster international cooperation between
airlines and between their governments.
With the outbreak of SARS, IATA closely worked with the World Health
Organization to implement international airline guidelines and
recommendations to address safe passenger travel.
IATA also serves as a leader in global safety, working closely with
the U.S. Department of Transportation on behalf of safer skies. A
great example of IATA's leadership is its work in promoting and
enhancing the Safe Skies for Africa initiative.
Safe Skies for Africa is helping us to support Africa's integration
into the global economy by promoting sustainable improvements in
aviation safety and security, and I thank IATA for its valuable work.
This vital initiative has already facilitated preliminary surveys of
safety, security and air navigation systems in eight of the nine Safe
Skies countries. Technical assistance is being provided to prepare
countries to meet ICAO [International Civil Aviation Organization]
safety standards and an International Aviation Safety Assessment ---
an FAA [Federal Aviation Administration] safety evaluation process of
government oversight of aviation safety.
Training and facility needs assessments are being conducted to
identify specific training needs and to support the eventual
establishment of regional training centers of excellence. We've also
created a virtual aviation-training symposium at --- www.ssfa.net. The
website is used to share, exchange, and post information related to
African aviation training needs.
During the past decade, this industry has made great strides in
discarding its past reliance on government-imposed regulations in
favor of greater market responsiveness and more open skies agreements.
History will remember this transformation.
And to ensure even greater levels of global trade and further
expansion of the world's economy, this transformation must continue.
In recent years, many of the world's long standing and restrictive
bilateral agreements have been replaced by more liberal open skies
agreements. This liberalization has been successful because it
produces public benefits that are simply not possible under
restrictive regulations.
Liberalization provides airlines with the opportunities and incentives
to become more efficient. It provides airlines with new business
opportunities while strengthen existing operations. This freedom to
grow and compete should be at the heart of every aviation agreement
worldwide.
While bilateralism opened markets in the 20th century, the 21st
century requires a new model. In order to further expand aviation
markets, we need a broader, multilateral or regional framework that
replaces the current patchwork of aviation agreements. I encourage you
to join us in crafting a vision for what is possible in global air
transportation.
The European Union (EU) provides one model for establishing an
internal market for aviation services in a specific region. The EU, as
part of its broad, single market reforms, has transformed the once
separate bilateral aviation markets of its members into a single,
liberal aviation market that is open to all airlines from EU member
states.
The European Commission is now seeking a mandate from EU member
countries to represent them in aviation negotiations with the United
States. We look forward to those discussions once the Commission
receives a comprehensive negotiating mandate.
The Asia Pacific Economic Cooperation (APEC) forum provides another
model for establishing a collective approach to international air
service.
A multilateral aviation agreement involving the U.S. and six other
nations, including one non-APEC economy, currently provides the
parties' airlines with the opportunity to operate freely between and
among each other's territories.
The effect has been to create one large open aviation market between
the U.S. and each of the parties, as well as between the other
countries.
This APEC multilateral agreement also provides new opportunities for
investing in airlines of the parties by eliminating many of the
traditional restrictions based in bilateral agreements.
Significantly, the agreement is open to accession by both APEC and
non-APEC economies, creating a streamlined mechanism for expanding
commercial aviation opportunities beyond a bilateral or even regional
context.
The U.S. Department of Transportation recently submitted to the
Congress a request for consideration of a proposal to grant U.S.
airlines greater access to foreign capital markets. The request raises
the permissible level of foreign ownership of voting stock in U.S.
airlines to 49 percent, provided that effective control remains in
U.S. hands. This change would make U.S. law broadly consistent with
the EU rules governing ownership and control of EU member-state
airlines.
It is my sincere hope that Congress will include this provision in the
aviation reauthorization legislation that it is currently working on.
I know that liberalizing national ownership rules is something that
Director General Bisignani and IATA have endorsed.
This topic was perhaps the most prominent individual issue discussed
during ICAO's Fifth World Air Transport Conference in March. There was
overwhelming support at the Conference for liberalizing airline
designation criteria provided that there are clear lines of
responsibility for safety and security oversight.
Investment restrictions are a sensitive subject, but given the vital
contribution that air service makes to our economies and to our daily
lives, we must begin looking at ways for airlines to have increased
access to the pool of global capital.
It is important that airlines have the ability to attract the capital
investment necessary to ensure their continued ability to promote
trade and economic growth, and to give our citizens access to new
services.
Finally, let me talk about the importance of infrastructure and
capacity. There is a significant danger, that as a result of the
unprecedented severity of the downturn we are experiencing in the air
transport sector, we may lose focus on the importance of expanding
capacity --- both at our airports and in our air space. That would be
a very serious mistake.
If we fail to continue to grow system capacity, it is absolutely
certain that we will find ourselves unprepared to accommodate the
demand for air travel when the global economy rebounds.
In the U.S., we still remember vividly the congestion and delay that
characterized air travel in our country during the summer of 2000. We
owe it both to our citizens and our airlines to ensure that we never
again subject them to that level of inconvenience and expense.
Is it for that reason that the Bush Administration has submitted
legislation to the U.S. Congress that, if enacted, will ensure funding
to support continued expansion of our airport and airspace
infrastructure over the next four years.
In addition I have asked the Federal Aviation Administration to
develop a new initiative for modernizing the way we manage our air
space. The FAA has worked effectively to grow the capacity of our air
traffic control system over the past few years, notably through our
Operational Evolution Program [OEP].
But the successes realized through the OEP --- as essential as they
are to keeping up with demand over the course of the next decade ---
will not be sufficient to accommodate the air transportation market 15
or 20 years from now. We need something more.
In response to that challenge, the FAA has established a team that is
working with my office, DOT, and other agencies in creating a roadmap
to the future.
Of course, we know we can't pursue this objective on our own.
Improvements in air traffic management must be embraced on a global
basis or the system will become hopelessly fragmented. For that
reason, we look forward to cooperating with our friends in other
regions of the world as we march toward a more robust system -- a
system capable of accommodating whatever the market may require in the
future.
Thank you very much for the invitation to join you this morning. I
wish you a very successful 59th Annual Meeting as you discuss and
debate the critical issues facing the aviation industry. I look
forward to working together toward even more international aviation
successes.
(end text)
(Distributed by the Bureau of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)
It's becoming glaringly obvious, with his economic assault on America's Middle Class, George W. Bush is well aware that investment won't be coming from domestic sources (despite his ballyhooed tax cuts). Therefor he's advocating increased foreign ownership and control of our nation's privately owned assets, including those that contribute to our National Security.
Under current law, at least 75% of the dividends paid out by U.S. airlines would flow to American stockholders. George W. Bush can't stand the idea that this may include average Middle Class Americans. Under his new proposal, up to 49% of the dividends will be paid out overseas, drained from the U.S domestic economy.
The dividends that'll flow like crazy once American stockholders are screwed under Chapter 11 reorganization. Out with the old American stockhoders, in with the new foreigners at pennys on the dollar.
I assume you're investing your life savings if you really believe this.
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