Air Transport World

Controlling interests. (investing in other nations' airlines) (editorial)

The rot infesting much of the foundations of the U.S. airline industry was uncovered by increased fuel costs after iraq's August conquest of Kuwait (ATW2/91). The subsequent battle to liberate Kuwait that began Jan. 16 led to an overall collapse of airline traffic, particularly international traffic. As this is written, airlines in the U.S. and around the world are hurting badly. The fear of terrorism that is chasing passengers away may not subside immediately after-the fighting stops. This, on top of the pre-existing economic downturn, will cause serious damage.

The fading fortunes of many of the world's airlines have re-emphasized the debate on the desirability of carriers to buy interests, perhaps even controlling interest, in other nations' airlines. The arguments in favor are that it is inevitable in the move toward globalization and some carriers need additional capital to survive.

While at this point be few airlines seem to have the wherewithal to supply this capital-most appear preoccupied with minimizing their own losses and existing investments have been disappointing-the issue has been seized upon by the U. …

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