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tructures ? Economies of scale in handling passengers and cargo. Opponents ? Local interests are often illserved by deregulation ? Opponents argue that local interests are often illserved by deregulation since airlines are free to discontinue service and to wage predatory price wars that put petitors out of business ? The high barriers to entry in the industry further exacerbate this situation 公司 LOGO與名稱 Q3 ? Another major consideration deals with the political dimensions of the question. Because most governments see airlines as a key national industry, they oppose giving foreign carriers access to domestic routes on grounds of both national security and consumer welfare. 1. Countries believe they can save money by maintaining small air forces and relying on domestic airlines in times of unusual air transport needs. For example, government used mercial carriers to help carry troops to and from Iraq. 2. As well, airlines are a source of national pride, and aircraft symbolize a country?s sovereignty and technical petence. 公司 LOGO與名稱 Q4 The Foreign Ownership Restrictions on Airlines ? The United States and Canada restrict foreign ownership to 25% ? The EU has taken steps to liberalize within Europe and sets a 49% limit on nonEuropean ownership. ? In Australia and New Zealand, foreigners are permitted to acquire up to 49% of the equity of an international carrier and up to 100% of a domestic airline. 公司 LOGO與名稱 Q4 Reasons 1. We need US carriers for national security ? US believe they can save money by maintaining small air forces and relying on domestic airlines in times of unusual air transport needs. Argument: ? It would be cheaper and better if the US government simply tendered for charters on the open market 公司 LOGO與名稱 Q4 Reasons 2. Foreign Airlines Don39。 only the Profitable Routes ? The foreign owned airline would only fly on the 3