Airline ownership and control rules: at once both irrelevant and enduring

There seems to be a growing consensus in the airline industry that the rules restricting the foreign ownership and control of airlines are archaic and should be significantly liberalised or abolished. However, a majority of delegates at the CAPA Airline Leader Summit in Dublin of 11-May-2017 did not expect the rules to be discarded any time soon.

Removal of the restrictions would allow meaningful cross border mergers and acquisitions on a global basis and lead to significant benefits to the airline industry's economic performance. There has been change in this area and some significant examples of government relaxation, or waiving of the rules.

Nevertheless, the rules, which originate in the Chicago Convention of 1944, have proved to be notoriously durable over many decades. Currently, most of the change is coming from efforts exerted by airlines to find new ways to circumvent the rules on ownership and control. This simultaneously illustrates both the increasing irrelevance of the rules and their enduring stickiness.