No airline can fly any international route covered by a bilateral air services agreement unless it is at least 50.1 per cent owned by one of the signatories to that agreement. However I believe an EU based airline operating an international route where one of the signatories is the EU is only required to have a minimum of 50.1 per cent EU ownership.
Multi-national airline conglomerates, AF
and Lufthansa Group address these restrictions in their complex corporate structures. So, for example, International Consolidated Airlines Group (IAG
) is a Spanish based corporation. When formed it was majority owned (55 per cent) by the former shareholders of British Airways plc. In turn British Airways plc had been majority owned by British individuals and financial institutions. However it had a substantial foreign (mainly American) ownership that was in excess of 40 per cent.
owns 100 per cent of the economic rights of British Airways. However it only owns 49.9 per cent of the British Airways B shares. 50.1 per cent of these shares in which operational control of BA
is vested, are owned by a private British registered company.
This structure is illustrated in Slide 63 of a presentation by Willie Walsh (then CEO of British Airways, now CEO of IAG
) that can be viewed here:
Because of these restrictions airlines like LH
before their merger into the current conglomerates used to monitor foreign ownership of their shares. They published the level of that ownership in their Annual Report. Their Articles of Association gave them the authority to force foreign owners that had bought shares so that the 49.1 per cent barrier was broken to sell sufficient shares to take foreign ownership below that barrier.
I do not know whether the same applies to the likes of IAG
but believe that since IAG
does not have operational control over BA
that this is no longer a requirement.