US TO ALLOW GREATER FOREIGN INVESTMENT IN AIRLINES
In a move designed to pump fresh money into the financially ailing US airline industry, the government opened the way Wednesday for foreign investors to own as much as 49 percent of America carriers. In the first action under a new interpretation of an old rule, Transportation Secretary Samuel Skinner said KLM Royal Dutch Airlines and Elders Ltd. of Australia would be allowed to keep up to a total of 49 percent of Northwest Airlines.
The two companies bought more than half of Northwest in 1989 when the airline was taken over by a group led by Alfred Checchi. The US initially said the percentage would have to be trimmed to 25 percent.
But Skinner said in a speech, ``We will no longer consider total foreign equity investment by itself to be an indicator of foreign control if it is less than 50 percent of total equity.''
Under a law written in the 1930s, foreigners still are prohibited from owning more than 25 percent of any domestic carrier's voting stock.