Law and policy of substantial ownership and effective control of airlines : prospects for change

• Main Author: Lelieur, Isabelle.
• Other Authors: Milde, M. (advisor)
• Format: Others
• Language: en
• Published: McGill University 2002
• Subjects: Law.
• Online Access: http://digitool.Library.McGill.CA:80/R/?func=dbin-jump-full&object_id=32811

Should the lack of confidence in the airline industry, led by the September 2001 terrorist attack, stop the liberalization process of the airline ownership and control? Following this dreadful event, even though the rationale of the ownership and control restrictions comes back now to the original concept of national identity, States should pursue the liberalization of cross-border investments, which will undoubtedly contribute to the growth and expansion of the airline industry. === Indeed, the principle of airline substantial ownership and effective control is one of the biggest impediments to the air transport industry growth. Legitimately included in the bilateral agreements since 1946 for national security reasons, States have maintained the principle over the years and used it as a protectionist tool, as well as a bargaining chip. Today, considering that liberalization and globalization concepts are already well-established in the biggest industrial sectors, and a large number of cross-border investments occurs in most of the service sectors through mergers and acquisitions, the time is ripe to remove national restrictions on foreign investments from the airline industry. A number of States have already liberalized their ownership system, but the reluctance of the United States to open their airlines' capital to foreign investments, slows down considerably the worldwide liberalization process. === After describing the current national policies regarding the ownership and control of airlines and examining their rationale, this thesis will discuss the consequences of the recommended liberal system. Advocating a total liberalization of cross-border investments, this thesis will then consider the steps to be taken towards achieving that goal, as well as the role of the international organizations in this process.