Travel issues to be addressed by new US administration

With Democrat Barack Obama to be sworn in as the new U.S. president and Democrats in control of Congress, it is expected that a number of travel-related issues will be address by the government beginning in the coming year.

Traditionally, the Democrats have taken a stance against airline consolidation.

It is unlikely that the new government will permit additional airline mergers and that it will make it difficult for airlines to receive anti-trust immunity. This is particularly significant in light of American Airlines, British Airways, and Iberia seeking such immunity on joint operation of transatlantic services.

President-elect Obama has already indicated that he will not allow increases in foreign ownership of airlines exceeding the currently-permitted 25 per cent stake, which is in line with the stance taken by labour unions that fear foreign ownership would lead to job cuts.

Obama’s position threatens the second round of the country’s Open Skies agreement with the European Union (EU), which is expected to commence by 31 May 2009 at the latest.

The EU is strongly opposed to limiting foreign ownership, and after the investment made by the airlines to acquire takeoff and landing slots at Heathrow it is not likely that the agreement will be rescinded.

What may occur is for the U.S. to concede on some other issues of policy, such as granting anti-trust immunity to American, BA, and Iberia. It is not expected that the EU will implement bilateral agreements once again.

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