Congressman Brat files “Free to Fly Act” law, opening foreign investments in U.S. airlines

Congressman Brat files “Free to Fly Act” law, opening foreign investments in U.S. airlines

Republican Virginia Congressman Brat just introduced H.R. 5000, the Free to Fly bill. (Click to read) 

The updated bill is essentially the same policy the Congressman outlined previously, but has been modified to counter any opposition arguments, thereby ensuring any new foreign-owned U.S. airline subsidiary complies with all U.S. law, including explicit provisions ensuring all employees are American workers to comply with existing U.S. law, and explicit requirements that the airlines are based in the U.S. and are under the day-to-day control of Americans.

Other tweaks made explicitly ensure the airlines are regulated the same as U.S. airlines and would be eligible for the Civil Reserve Air Fleet if the Secretary of Defense signs off. Essentially, the only difference between these new airlines and current airlines is that foreigners could freely invest in them, and current U.S. airlines would benefit from the additional capital.

The Hawaii-based International Coalition of Tourism Partners endorsed the bill. Juergen Steinmetz, chairman of ICTP said: “We’re excited to endorse the bill introduced today by Congressman Brat. It will open new channels of competition and ensures our airlines industry can compete with the world.”

MYTH #1: The Free to Fly Act seeks to overturn current cabotage laws and open the domestic U.S. flying to foreign carriers.

FACT: Free to Fly maintains the ban on cabotage, the prohibition on foreign air carriers flying domestically [49 U.S. Code § 41703]. All airlines flying domestically would be under American management, day-to-day control, and jurisdiction.

MYTH #2: Free to Fly would harm American workers and decimate U.S. aviation.

FACT: Free to Fly explicitly requires that foreign-owned U.S. airline headquarters and base of operations be located in the U.S., that all employees (such as pilots, flight attendants, and ground crew) must be American workers [see Sec. 3(4)] and maintains all labor protections and workplace safety rules.

MYTH #3: Free to Fly would weaken regulatory protections and endanger consumers.

FACT: Free to Fly requires airlines to be established and regulated under all U.S. law [Sec. 4(b) and Sec. 8]. Free to Fly has been endorsed by leading consumer groups such as FlyersRights.org, Travelers United, the Air Travel Fairness Coalition, and Consumer Action for a Strong Economy.

MYTH #4: Free to Fly would harm national security and endanger defense.

FACT: In addition to the requirement that the headquarters and base of operations be in the U.S., and that all employees must be Americans, the President may consult with the DOD and DOS and disapprove of a decision by the Secretary of Transportation to grant or modify an air carrier certificate based on foreign relations or national security concerns [Sec. 9]. By requiring U.S. incorporation, the government would have the same legal and regulatory authority over a foreign-owned U.S. carrier as it does over a U.S. carrier owned by a citizen. The military’s airlift capacity would be augmented, as these airlines would be Civil Reserve Air Fleet eligible if needed while priority would be given to citizens [Sec. 5 and Sec. 12].

MYTH #5: Free to Fly is unnecessary.

FACT: Airline investment restrictions currently in place are outdated and anti-growth, and don’t exist in almost every other U.S. industry. Many governments such as the European Union, Brazil, Canada, India, and Australia have relaxed their restrictions to encourage investment, travel, and tourism. The World Economic Forum has reported that the benefits to eliminating these restrictions include reduced fares for air travelers, benefits for taxpayers, increased financing options and financial stability for airlines, and protection and creation of jobs.

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