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Airline Divisions Legal?

Mon Jul 08, 2002 7:36 am

Would it be allowed for an airline to have certain divisions? For instance, let's take Bob Airways based at JFK. They are a US airline, so thus an American company. Bob Airways wants to expand to Europe beyond the destinations that can fill a plane from the US to Europe such as CDG or FRA. Bob Airways wants to fly to smaller destinations. Could Bob Airways start a division of Bob Airways, Bob Airways Europe, based in FRA? Then let's say that Bob Airways wants to set up other divisions, Bob Airways Austalia (SYD), Bob Airways Asia (NRT or BKK), Bob Airways Africa (CAI or Nairobi or JNB), Bob Airways Middle East (DXB), etc. Could Bob Airways do that?
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RE: Airline Divisions Legal?

Mon Jul 08, 2002 7:38 am

It depends on the restrictions on foreign ownership imposed by each individual jurisdiction. Even though Bob Airways Europe may be a European entity, its ownership structure would still be American and that is where restrictions begin the creep in.
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RE: Airline Divisions Legal?

Mon Jul 08, 2002 11:07 am

In theory, if Bob was a dual national, he may be able to circumvent some tof the restrictions, but that would then open up another line of questioning.
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RE: Airline Divisions Legal?

Mon Jul 08, 2002 11:47 am

Isn't this fairly common practice in Europe. KLMuk, and DuetscheBA all come to mind. Aren't there BA Franchises that do more of the same thing. Obviousily it would be a lot more difficult for an European Airline to start an American Division, or Visa-Versa.
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RE: Airline Divisions Legal?

Mon Jul 08, 2002 1:46 pm

I always assumed KLMuk and such were similar to regional affiliates, owned in their own country and contracting out to the respective airline.
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RE: Airline Divisions Legal?

Mon Jul 08, 2002 2:29 pm

Isn't Continental Micronesia a variation of what you're talking about?
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RE: Airline Divisions Legal?

Mon Jul 08, 2002 2:33 pm

You mean like what Richard Branson has done? (ie Virgin Atlantic in England and Virgin Express in Australia)
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RE: Airline Divisions Legal?

Mon Jul 08, 2002 6:37 pm

Are KLMUK and DeutscheBA actually British and German companies respectively? And aren't you allowed to established a company anywhere within the EU when you're a EU citizen?

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RE: Airline Divisions Legal?

Mon Jul 08, 2002 7:34 pm

I think that it is. Every airline (major ones) have divisions and subsidiaries.

Singapore Airlines for example has many divisions/subisdiaries. Here are the list of primary (direct) subsidiaties.

Singapore Airlines Limited owns:
87% of Singapore Airport Terminal Services Limited
100% of SilkAir (Singapore) Private Limited
56% of Abacus Travel Systems Pte Ltd
87% of SIA Engineering Company limited
100% of Singapore Airlienes Cargo Private Limited
100% of SIA Properties (Pte) Ltd
100% of Singapore Flying College Pte Ltd
100% of Star Kingdom Investment Ltd
100% of Sing-Bi Funds Private Limited
100% of Auspice Limited
100$ of Singapore Airlines (Mauritius) Ltd
100% of Singapore Aviaion and General Insurance Company (Pte) Limited
76% of Singapore Airport Duty-Free Emporium (Private) Limited
51% of Cargo Community Network Pte Limited
51% of Aviation Software Development Consultancy India Ltd
50% of Service Quality (SQ) Centre Pte Ltd
49% of Virgin Atlantic Limited
35.5% of SIngapore AIrcraft Leasing Enterprise Pte Ltd
21% of Asia Leasing Limited
20% of Evergreen Air Cargo Services Corporation
20% of Ritz-Carlton, Millenia Singapore Properties Private Limited
4.6% of Air New Zealand
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RE: Airline Divisions Legal?

Tue Jul 09, 2002 2:40 am

In the US, the carrier must be a US citizen to operate in the country. The legal test is complicated and rests own the ownership of the stock and the citizenship of the managers and directors of the company. Continental "Air Mike" is based in Guam so it has no such problem.

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