European Regulators Hold U.S. Airlines Hostage

The European Union is holding firm on its plans to tax U.S. airlines for time spent in domestic and international airspace. The unprecedented power grab is a clear violation of international law, which allows each nation to control its own airspace.

If you think the U.S. Congress is going to roll over and take it, you guessed right – at least until this point. But, it wouldn’t be because of the usual political infighting, rather the work of one Democratic senator who placed an anonymous hold on the legislation. Yes, despite broad compromise and a coalition of support that even includes liberal Senators John Kerry (MA) and Barbara Boxer (CA), legislation to exempt U.S. airlines from the control of European regulators currently has no shot of passing.

Governments around the world have done their part to protect their industries and send a message to Europe. China has exempted its airlines from the European tax, while also banning the purchase of aircraft from European makers, a clear blow to Airbus. India has also exempted its airlines from the tax.

Just earlier this week, there were signs that the EU might be warming to international concerns. The AP reported that the EU might suspend the carbon fees and allow the global community to come to consensus in the International Civil Aviation Organization.

Apparently, the optimism was just that. Later in the week, the EU’s top climate commissioner said that the region would not change course.

This leaves yet again one recourse. The U.S. government can exempt airliners from Europe’s regulations. Or, the Senate can continue to dilly dally and allow U.S. companies to be held hostage by European regulators – the best in the business. Not only would that approach introduce new burdens to U.S. arilines, but it also would put domestic airlines competitively behind Chinese and Indian airlines, an untenable position for a vulnerable industry.