Continental Airlines President calls US DOT Proposal Unlawful

Continental Airlines President Jeff Smisek testified on Tuesday, that the US Department of Transportation’s supplemental proposed rule to allow foreign control of U.S. airlines is both unlawful and unworkable, and that Congress should take the reins in creating appropriate laws under which foreign entities could increase capital investment in American carriers.

Testifying before the Aviation Subcommittee of the Senate Committee on Commerce, Science and Transportation, Smisek said, “In their Alice in Wonderland world, the Department of Transportation is trying to ‘interpret’ a requirement that actual control of U.S. air carriers must be in the hands of U.S. citizens to mean that actual control of U.S. air carriers may be in the hands of foreign citizens.

“The truth of the matter is that the proposed rule doesn’t offer any protection from foreign domination and control, except for the limited, naive and impractically crafted attempt by DOT to carve-out safety, security, military airlift and organizational documents,” Smisek added.

“DOT is promising foreign investors that they will have control of U.S. airlines because otherwise the EU will refuse to sign an open skies agreement,” Smisek said. “And DOT is promising the Congress that foreigners won’t have control of U.S. airlines. But the rule can’t – and doesn’t – do both. DOT is telling Europeans they can control U.S. airlines and telling Congress that the foreign control can be revoked by the U.S. shareholders at any time, but DOT cannot have it both ways.

“The DOT’s supplemental proposal will be reversed by the courts if issued by DOT as currently drafted,” Smisek said.

Thousands have registered concerns and objections in the DOT docket, and nearly 190 Members of Congress have voiced support for legislation designed to prevent the DOT from issuing the final rule for at least a year or until further studies have been completed.

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