European airlines -- including Aer Lingus and Ryanair -- could be controlled by non-EU rivals and investors in the future if major changes to ownership rules announced yesterday are pushed through.
The European Commission said airlines in the EU are being denied important new sources of capital due to "archaic ownership and control restrictions", and wants to overhaul the rules so that global cross-ownership of airlines is permitted.
Such a move could see US investors owning the bulk of Ryanair, chief executive Michael O'Leary has conceded.
At present, non-EU investors can only own an accumulated maximum of 49pc of an EU airline, other than in exceptional circumstances.
Airlines such as Ryanair have to be very careful that ownership of its shares by US investors, for instance, never rises above that level.
"It is now time to address this issue more vigorously and to take the additional steps envisaged in the EU-US air transport agreement to liberalise airline ownership and control in order to allow airlines to consolidate and attract the investment they need," said the European Commission yesterday.
Mr O'Leary said US investors have also seen how low-cost carrier Southwest Airlines has grown over the last three decades and that piqued their interest in Ryanair.
"They recognised earlier than most of their European counterparts that Ryanair could grow to be Europe's Southwest," he said.
But speaking at Ryanair's annual general meeting last week, Mr O'Leary said that he'd like to see ownership rules relaxed. "European airlines are free to fly in the US and vice versa," he said.
"There's really no reason for restriction on airline ownership. It remains in place largely because of opposition from the US government.
"If it was removed and Americans and Europeans could freely own as many shares in European or American airlines as they wished, then I've no doubt that American investors will own the majority of Ryanair."
Foreign airlines such as Abu Dhabi-based Etihad, which owns just under 3pc of Aer Lingus and has expressed an interest in owning more, is also limited by the EU ownership rules.
Non-US investors can only own an accumulated 25pc maximum of an American carrier's shares.
Ryanair is the world's 13th-biggest airline, according to the EU's methodology.
The major policy document issued by the European Commission yesterday also envisaged new aviation agreements with countries such as Egypt, Turkey and Ukraine. It wants to conclude those negotiations by 2015.