I wonder what makes USDOT think a foreign national is any more or less likely to follow the rules than an enormous multi-national corporation like United or Delta?
These foreign-ownership rules do strike me as counter-productive protectionism.
The airline industry is extremely protectionist. I'd rather fly on Qantas JFK-LAX (they do fly that route) but cabotage rules prevent them from selling tickets on it.
Because evidently if any competition comes to the domestic aviation industry, US airlines are doomed.
History has pretty much established that competition in the space is destructive.
Allowing international carriers transiting the US to do intra-city flights soaks up demand and lowers route profitability for busy routes.
Past practices were to balance demand across city pairs so as to avoid local monopolies (ie. Minneapolis and Delta/Northwest) and ensure universal service. Deregulation broke all of that, so we have price competitions at the cost of a race to the bottom in service and industry cycles of bankruptcy and consolidation. Long term, that means monopoly levels of service and pricing.
Huh? Airline deregulation since 1978 is one of the poster children for improved service to consumers. Any transportation business is inherently subject to the flux of fuel prices and demand as it varies with overall economic activity. If anything, difficulties airlines now face are compounded by the degree of regulation that is still in force.
The US isn't really alone in this; allowing foreign entities to own a controlling interest in a domestic airline is not super common outside of the EU (where the "foreign"-ness of a company headquartered in another EU member state is kind of blurry anyway).
See, for example, Etihad's 49% stake in Alitalia, Delta's 49% stake in Virgin Atlantic, etc. -- significant investment happens, but controlling share is a lot less frequent.
These foreign-ownership rules do strike me as counter-productive protectionism.