“Stupid” Law Prevents Foreign Investors From “Owning” US Airlines

Slate magazine’s Daniel Gross makes the case that the law prohibiting foreigners from owning more than 25 percent of an American airline, is not only “stupid” but rooted in “misplaced hostility to foreigners, national-security paranoia, and plain-old protectionism.” He claims the law is obsolete * (the Federal Aviation Act was created in 1938 1958 (the Civil Aeronautics Act was created in 1938) and damaging to consumers.

Most recently, the law prevented British billionaire Richard Branson from obtaining an operating certificate for Virgin America.

In a world where we have the Transportation Safety Administration, do we need to restrict ownership of airlines for national security reasons? What do you think? Would foreign investors make you think twice about flying “American” Airlines?—MEGHANN MARCO

Air Heads [Slate]

UPDATE: * Gross is right. The Federal Aviation Act is obsolete. It was repealed during the codification of United States law and is now Title 49, Subtitle VII of the US code. For further niggling, see the statute’s definition for “Citizen of the United States.” (Thanks to Bill!)