Case 227 - Bailing Out USAir: Balancing Domestic and Foreign Economic Interests

Tarry, Scott

In 1992, during the heat of the U.S. presidential campaign, a British Airways proposal to buy a portion of USAir, America’s sixth-largest airline, became the focal point in an intense debate about trade, American jobs, and a foreign firm’s attempt to buy a controlling interest in an American carrier. While U.S. Department of Transportation rules prohibited the British offer because it exceeded limits on investment in U.S. airlines, USAir and its suitor sought an exemption from the restrictions. President-elect Bill Clinton faced the difficult task of balancing domestic economic interests against broader foreign policy interests and relations with the British. The case study offers an interesting perspective on the process by which groups attempt to influence national decision-makers, and how those leaders attempt to choose the path that best serves both their own political goals and the national interest.