Thursday, March 11, 2010

FAA Reauthorization Poised to Move Forward

After spending months in limbo, the 2009 FAA Reauthorization Act is set to move forward for consideration after Tennessee Senator Bob Corker stated he would no longer stand in the way of the bill.  See Bill Theobald, Sen. Corker Releases Hold on Bill Affecting FedEx Labor, Tennessean, Mar. 10, 2010 (available here); see also Elise Foley, FedEx Warns Congress Not to Pass UPS Bill, Politico, Mar. 11, 2010 (available here).  Corker, along with fellow Tennessee Senator Lamar Alexander, had opposed to the bill due to a controversial provision which would move FedEx from its current coverage under the Railway Labor Act to the union-friendly National Labor Relations Act.  Though it's unclear at this point what sort of deal may have been struck in the Senate, according to Corker's office, the FAA Act will no longer carry the FedEx labor provision.

While today's news is undoubtedly good for FedEx, it may put a dark cloud over other parts of the air transport industry.  As discussed last year on the blog, see here, here, and here, the FAA Reauthorization Act, H.R. 915, 111th Cong., contains provisions which would would sunset all antitrust immunity for international airline alliances three years after enactment (sec. 426(e)); tighten the statutory requirement that domestic airlines be under the "actual control" of U.S. citizens by excluding foreigners from "control[ing] all matters pertaining to the business and structure of the air carrier" (sec. 801); and mandating twice-yearly inspections of foreign repair stations by FAA personnel (sec. 303).

All three provisions have been heavily criticized by officials from the European Union and its Member States.  In particular, the changes to the antitrust immunity law, which could compromise the operations of global airline alliances, and the tightening of the "actual control" requirement for U.S. airline ownership is seen as an affront to the ongoing negotiations between the U.S. and EU for a second stage accord to build on their 2007 air services agreement.  The FAA Act's inspection requirements concerning foreign repair stations has also come under fire as a needless expenditure of time and monetary resources.

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