Continental’s Smisek: DOT living in “Alice in Wonderland world”
Continental’s Smisek: DOT living in “Alice in Wonderland world”
Continental Airlines’ President Jeff Smisek Tuesday showed his anger at the Department of Transportation’s proposal to allow further foreign control of U.S. airlines to Washington.
Smisek, testifying before the Aviation Subcommittee of the Senate Committee on Commerce, Science and Transportation, said the proposal is unlawful and unworkable, and urged Congress to create appropriate laws under which foreign entities could increase capital investment in American carriers.
Last week, the DOT put forward a revised proposal that would prevent international investors from having the ability to hire, fire or control the budgets of senior U.S. airline managers with direct responsibility for safety, security and national defense airlift commitments. An initial proposal in November was designed to raise foreign investment for the ailing U.S. airlines by allowing international investors more say in some aspects of airline operations such as scheduling and marketing.
“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,” Smisek said.
“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.
“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. 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 added.