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Sat, Apr 16, 2016

Norwegian Air International Receives Tentative DOT Approval

ALPA Says Move Exposes 'Flawed' System

The U.S. Department of Transportation on Friday issued an order proposing to grant a foreign air carrier permit to Norwegian Air International.When made final, the permit will allow Norwegian Air International to begin operations to the U.S., including the first-ever service between Boston and Cork, Ireland.

“A final approval, based on the Open Skies Agreement between the U.S. and EU, will be win-win for consumers and the economy on both sides of the Atlantic. It will allow Norwegian to expand our U.S. operations. Our continued presence in the U.S. will create thousands of jobs and generate tens of millions of dollars of economic activity for the Group’s U.S. destinations,” said CEO Bjørn Kjos of Norwegian Group.

Norwegian intends to continue hiring hundreds of American-based crewmembers, bring hundreds of thousands of European tourists to the United States, continue to offer the American people affordable fares and efficiently utilize an $18.5 billion order of planes from American manufacturer Boeing.

Norwegian currently has a firm order of 149 Boeing 737s and 787s valued at more than $18.5 billion at current list prices. During the past seven years, Norwegian has taken delivery of 103 brand new U.S. manufactured Boeing aircraft (direct buys and leases).

Norwegian flies fuel-efficient Boeing 787 Dreamliners and Boeing 737s on its routes between the U.S. and Europe.

ALPA, which has long opposed the carrier's expansion into the U.S., said the decision  exposes serious flaws in U.S. aviation policy that the union says asserts must be corrected to safeguard fair competition for U.S. airlines and their workers.
 
“We are extremely disappointed by the DOT’s intention to permit Norwegian Air International to fly to and from the United States because it is an affront to fair competition,” said Capt. Tim Canoll, ALPA’s president. “DOT is proposing to allow a foreign airline to compete directly with U.S. airlines on long-haul international routes with unfair economic advantages.
 
“Norwegian Air International has picked its place of incorporation based on whether that nation’s tax and regulatory laws are favorable,” continued Capt. Canoll. “As a result, NAI gains an enormous competitive advantage over U.S. airlines, which are required to do business under one set of U.S. laws and regulations. This is not a fair market.
 
“This is yet another very troubling instance that demonstrates the failure of our trade agreements to protect American workers,” Canoll said.
 
ALPA underscores that the DOT is charged with encouraging fair wages and working conditions and ensuring that U.S. air carriers maintain a strong competitive position in the global marketplace.
 
Norwegian Air Shuttle, NAI’s parent company, centers its operations in Norway and has established NAI as an Irish airline expressly to avoid Norway’s employment laws.
 
The record in this case shows that NAI intended and may still intend to use flight crews that will be hired on Singapore employment contracts with compensation substantially below that of Norwegian’s Norway-based employees. This “flag-of-convenience” business practice is similar to that employed in the shipping industry, where companies routinely shop for weaker laws and regulations. As a result of this practice, tens of thousands of U.S. maritime industry jobs have been lost.
 
In addition, NAI’s operations in the transatlantic market are at odds with the U.S.–EU Air Transport Agreement, which is designed to deter efforts to undermine labor standards. ALPA has called for the U.S. government to evaluate current and future U.S. Open Skies policy to ensure it does not undercut fair competition by preventing flag-of-convenience business practices such as NAI’s.
 
NAI’s business plan has prompted an outpouring of bipartisan concern from Congress.  More than 200 members of Congress have sent letters to U.S. Transportation Secretary Anthony Foxx calling for him to deny the NAI application.  Both houses of Congress have passed legislation that was signed into law requiring DOT to ensure that any applications for U.S. foreign air carrier permits made under the U.S.–EU Open Skies Agreement follow the terms of the agreement as well as U.S. law.
 
“U.S. airlines and their workers are driven to compete and prevail in the international marketplace, but we need a level playing field,” said Capt. Canoll. “It is unfortunate that DOT’s tentative decision provides yet another example of how the U.S. government’s own policies can contribute to a competitive imbalance skewed against U.S. airlines and their employees. The United States must reform its international aviation policy to make certain that U.S. airlines can compete in the global marketplace. ALPA will ask DOT to revise its tentative decision and to deny NAI’s application for a foreign air carrier permit.” 

(Image provided with Norwegian news release, Sources: Norwegian and ALPA news releases)

FMI: www.norwegian.com, www.alpa.org

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