US House Could Vote On FAA Bill Thursday

Author: Alisa Brodkowitz  |  Category: Other Events

.

Reported from NASDAQ.com

By Josh Mitchell, Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- The U.S. House was poised to vote as early as Thursday on a major aviation bill that would toughen restrictions on foreign ownership of U.S. air carriers and create more hurdles for international airline alliances.

Airlines and the European Union have resisted those measures.

The provisions are part of a bill to renew the taxing and spending authority of the Federal Aviation Administration. The FAA would be authorized to spend $70 billion over four years on operations, construction and safety programs – including a down payment on long-held plans to modernize the nation’s air- traffic management system.

Funding for the programs would have to be approved in a separate step.

Airlines oppose a measure pushed by Rep. James Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee, that would break up within three years all airline alliances. Such groupings allow U.S. and foreign carriers to cooperate on scheduling and revenue sharing. Airlines would be able to seek new anti-trust exemptions to renew the alliances, but they argue the disruption would cost thousands of industry jobs.

Oberstar, who has said the alliances impede competition and take away U.S. jobs, said the intent is to give the U.S. government time to produce a study on the benefits of the partnerships.

The EU opposes a measure, also pushed by Oberstar, to toughen rules that require that 75% of a U.S. airline be owned and operated by U.S. citizens. Oberstar’s measure would spell out what activities must be controlled by U.S. citizens. Current law allows the federal government to determine the matter case by case.

The bill would also allow airports to charge higher fees to passengers to finance construction. The limit on the so-called passenger facility charge would increase to $7 from $4.50 per passenger, a change that lawmakers estimate would generate an additional $1.1 billion in annual revenue for airports.

The bill cleared the House Rules Committee Wednesday, and a vote by the full House could come as soon as Thursday. Support in the Senate is unclear.

-By Josh Mitchell, Dow Jones Newswires; 202-862-6637; joshua.mitchell@ dowjones.com

By Josh Mitchell

Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- The U.S. House passed legislation Thursday to curtail international airline alliances, a move proponents said would increase competition, but which the industry warned would cost jobs.

The bill, approved on a 277-136 vote, would also boost spending on airport construction and airline safety. The Federal Aviation Administration would get $ 70 billion over four years to carry out the programs.

Senate support for the legislation is unclear.

Airlines strongly opposed a measure that would strip them of exemptions to anti-trust laws three years after enactment of the legislation. The exemptions allow airlines to join global alliances that coordinate schedules and share revenue.

Airlines would be able to apply for new exemptions after three years, but under possibly tougher standards.

Rep. James Oberstar, D-Minn., chairman of the House Transportation and Infrastructure Committee, said he pushed the measure to prevent the industry from being dominated by several conglomerates that he said would have too much power to raise ticket prices.

But the Air Transport Association, representing major airlines, said the alliances improve efficiency and service and warned that eliminating them would cost up to 15,000 jobs.

The House legislation would also toughen rules that require that 75% of a U.S. airline be owned and operated by U.S. citizens. It spells out what activities must be controlled by U.S. citizens. Current law allows the federal government to determine the matter case by case.

Oberstar said the measure is designed to ensure that foreign investors don’t exert too much control over prices and schedules in the U.S. But the European Union said the provision runs counter to a landmark deal between the U.S. and EU to deregulate international air travel.

The House bill would also allow airports to charge higher fees to passengers to finance construction. The limit on the so-called passenger facility charge would increase to $7 from $4.50 per passenger, a change that lawmakers estimate would generate an additional $1.1 billion in annual revenue for airports.

http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=200905201827dowjonesdjonline001027&title=us-house-could-vote-on-faa-bill-thursday

Tags: , , , , , , ,

Leave a Reply