PLAYING FAIR IN THE AIR
International ownership of airlines is coming, like it or not. It is the inevitable result of growing multinational business alliances, which require increased global travel, and the fierce competition within the airline industry to serve these travelers.
In itself, there's nothing wrong with foreign investment in U.S. airlines. Indeed, much can be said for it. In the integration of KLM's and Northwest Airlines' services, the infusion of foreign capital and combined route structures could insure the survival of a weak carrier, if it works. There is potential for a strong airline to emerge with the financial resources to afford modern, safe equipment and also provide competition for the traveler's dollar.
The U.S. is by far the largest single air travel market in the world, and that, of course, is the lure for foreign airlines to tap into it. But BUSINESS WEEK believes that Washington should permit this only when U.S. airlines are allowed the same access in the investor's home market.
A precedent-setting case is now before the U.S. government with British Airways' bid to buy into USAir, a deal that would give BA virtually unlimited access to the U.S. By contrast, Whitehall imposes severe limitations on American air service to Britain. German (Lufthansa) and French (Air France) airlines have also expressed a desire to invest in U.S. airlines, but both countries also want to slap stiff new restrictions on American air service there. So far, the British have refused to ease their restrictions. The U.S. should send all of them an unmistakable message by refusing to approve the BA-USAir deal until London expands access.