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Mar 07, 1997

DePaul Law Professor Writes Groundbreaking Book on Opening Up Aviation Ownership for the Next Century

Brian Havel, DePaul University College of Law professor, says in a new book that it is time to allow foreign ownership of U.S. airlines and to open up international air routes. His book is titled "In Search of Open Skies: Law and Policy for a New Era in International Aviation, A Comparative Study of Airline Deregulation in the United States and the European Union."

"Open Skies," set for simultaneous release in the United States and Europe in March by Kluwer Law International in Cambridge, Mass., and Amsterdam, has been praised by European Transport Commissioner Neil Kinnock as an important contribution to the open skies debate. Kinnock said Havel's work breaks new ground in its comparative treatment of the United States and European Union in trying to increase airline competition. In his introduction, Kinnock writes that Havel's book poses "intellectual challenges to all of us whose professional mission is the evolution of new law and policy for the international air transport industry."

"The current policy and approach is too piecemeal," said Havel. "It is time to end the protectionism association between the national flag and the airlines," he said.

Havel said that as the result of European Union airline deregulation to be completed in April, a new global approach is possible. Bilateral treaties, which allow airlines to fly between countries but prohibit foreign airlines to fly routes wholly inside the United States or from owning U.S. airlines, are antiquated and should be scrapped, according to Havel. Instead he proposes the maximum liberalization of the market through an unrestricted open skies agreement between the United States and the European community, which would then be offered to other countries and regions to build a true global network of free airline competition.

The stage has been set by the forthcoming "code-share" alliance between British Airways and American Airlines. This agreement, widely viewed as anti-competitive, would not be necessary if a true system of open skies existed, Havel argued.

Havel said that bilateral treaties are an unpredictable way for U.S. airlines to gain access to the growing world market for airline services. France, for example, unilaterally abandoned its treaty with the United State in 1992 and continues to allow U.S. airlines into French airports only on a seasonal basis with no guarantee of future access.

"This is an absurd way for a 21st century industry to do business," Havel said.

"I know labor won't like foreign ownership," said Havel, "because they will think it will eliminate jobs. But in fact, it will mean a new source of capital which will invest real money in the industry, especially for smaller carriers."

As with any deregulation plan, some domestic airlines would not survive in the new order, said Havel, but others would become stronger both as domestic carriers and in new international markets.

"It will broadly strengthen the industry for the future," said Havel. "We wouldn't have lost Pan Am if this system had been in place." Pan Am folded in the late 1980s and another company has since begun flying limited service using the Pan Am logo.

This proposal should not raise safety questions because those systems are already well-advanced in both the United States and Europe, said Havel. "Technical cooperation by the safety agencies is far ahead of the business side of the industry," he said.

One of the major stumbling blocks to foreign ownership of U.S. airlines has been fear that it would allow a foreign civil airline fleet access inside U.S. borders during times of war. Havel said that is not a valid issue. While it is true that most U.S. personnel and material were moved by air during the Persian Gulf War, airline support for military operations could be limited during conflict.

Havel, who joined the DePaul faculty in 1994, teaches federal civil procedure, European Community law and international economic regulation.

He was educated in Dublin, Ireland, at both University College and Trinity College. He holds two graduate law degrees from University College and a master's degree in comparative European languages and linguistics from Trinity College.

He continued his graduate legal work at the University of Vienna, Austria, and the University of Strasbourg, France. He was the Wien Fellow in Corporate Law at Columbia Law School, where he received a master's and doctorate degree.

Before moving to Chicago, Havel was an associate with the New York international law firm of Paul, Weiss, Rifkind, Wharton & Garrison, where he practiced for five years in the areas of international antitrust and corporate litigation.