On Tuesday night, it was announced that Barack Obama is the president-elect, and will be taking office in late January. I’ve been interested in finding out how the new democratic led senate, house, and executive branch will shape U.S. Airlines. Already, Today in The Sky‘s Ben Mutzabaugh shared his thoughts on the issue. Bloomberg News also has commented on the issue. Both articles inform readers that Barack Obama may mean: higher labor costs, less overseas outsourcing, less route auctions, less foreign-ownership / involvement in domestic carriers. Based on what Barack Obama says, it appears as though he will make the airline industry more expensive, and Obama plans to fight for U.S. jobs within these carriers. What will happen?
Nobody knows for sure what Barack Obama may do. There is a good amount of speculation of what he may do. In today’s economic climate, the new policies proposed by Barack Obama can only mean one thing – a one-for-all type of deal. Sound familiar? Yes, it’s just like unions. And in a time where unions can mean float or sink for airlines, it’s no doubt that Obama’s America will help unions gain power and muscle to get what they want from the airlines.
Usually, Democrats tend to be all about the infrastructure of America, rather than the foreign policy-heavy Republicans. Barack Obama has already stated that he would like to decrease the allowable rate for foreign ownership of U.S. based carriers. The numbers that Obama would like to see of foreign ownership percentages are: 25% of voting stock and 49% overall. Bloomberg news’ article suggests that this will allow the U.S. to focus on the new air traffic control system and air traffic controller working conditions.
Another “win” for airlines is the auction of slots issue. For quite some time now, the Bush administration has attempted to auction off slots at New York City airports (La Guardia, JFK, and Newark). The plan was to boast competition, but all it really did was spark a ton of controversy. Without a doubt, this would help New York based carriers such as Continental Airlines, who maintains a hub in Newark, NJ.
Overall, I feel as though Obama’s take on U.S. airlines is slightly better than the Bush administration’s view. The only difference I have with Obama’s plan pertains to his foreign ownership policies. I see nothing wrong with keeping the foreign ownership levels the same. If a foreign investor / company desires to start an airline based in the United States, go for it! The airline would pay taxes and employ many. It appears as though that would align with the Obama’s overall plan.
Image: flickr.com
