FOREIGN TAKEOVERS OF UNITED-STATES AIRLINES - FREE-TRADE PROCESS, PROBLEMS, AND PROGRESS

Civil aviation has become an international industry, and many foreign air carriers seek access to the lucrative U.S. aviation market by purc hasing shares of U.S. airlines. However the Federal Aviation Act impos es limits on foreign ownership. In this Article, Mr. Grant argues that although the Department of Transportation previously exercised its di scretion by interpreting liberally its statutory mandate, recently the agency has appeared reluctant to encourage globalized aviation and, i n fact, has reversed the trend toward ''open skies.'' Mr. Grant analyz es the ''changed landscape'' of civil aviation, noting that troubled U S. carriers welcome capital from any source. He advocates a strategy o f ''liberalizing for leverage'' in aviation diplomacy; the United Stat es should implement a policy of explicit linkage between more liberal treatment of U.S. carriers overseas and permissive allowances for fore ign investment in U.S. airlines. Mr. Grant recommends amending the Fed eral Aviation Act so that it authorizes, and even directs, the Departm ent of Transportation to push for more open skies.