Saturday, July 22, 2006

United CEO: U.S. airlines over-regulated

Glenn Tilton, CEO of United Airlines parent UAL Corp., told an aviation conference last week that government regulations are holding back U.S. Airlines from competing with emerging international "super-carriers."

Business Week reports on what Tilton said:
...Limits on open access to foreign markets and cross-border investment opportunities need to be dropped. The over-regulation, he said, is the reason no U.S. airline is among the top 20 that fly internationally as measured by operating profitability.

He singled out the Department of Transportation's 11-year-old international aviation policy as not reflecting changed market realities, citing it as preventing the development of carrier combinations across national borders such as KLM and Air France in Europe.

"The restructuring of the network carriers has strengthened our ability to compete," said the chief executive of United and parent UAL Corp., which exited bankruptcy protection in February after 38 months of restructuring. "As we move to the future, we should be able to compete more effectively in the global market, not limited by regulatory 'protections' from international competition or international investment."

Airlines, Tilton said, should be allowed to function "the same way as other global businesses -- driven by the dictates of a free market, not government edicts."
Tilton said that airlines should be able to pursue whatever opportunities they can that make sense.
"We ought to be able to create in this country powerful combinations of companies that still are able to compete effectively in the U.S. and the consumer has no less choice," he said.
Source: United CEO: U.S. airlines over-regulated - Business Week

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