U.S. Denies Exemption as it Mulls Norwegian Air Permit

 - September 3, 2014, 8:16 AM
The U.S. Department of Transportation is still reviewing Norwegian's application for a foreign air carrier permit. (Photo: Norwegian Air Shuttle)

The U.S. Department of Transportation (DOT) dismissed an exemption Norwegian Air Shuttle sought for its Ireland subsidiary to operate to the United States, saying it needs more time to consider the airline’s application for a foreign air carrier permit. Labor unions that strongly oppose the airline’s effort hailed the decision the DOT announced on September 2, but called on the department to deny the air carrier permit.

In December, the low-fare airline applied for both a foreign air carrier permit and an exemption for its Norwegian Air International (NAI) subsidiary to conduct foreign-carrier scheduled and charter operations to and from the United States. Unions allege the airline is seeking to evade Norwegian and international labor laws and pay pilots less by establishing NAI as an Irish airline. The DOT dismissed the airline’s request for an exemption, which would have allowed NAI to operate while the department vets the permit application.

“The Department typically reserves its exemption powers in awarding foreign air carrier authority to situations where the circumstances of a case are sufficiently clear-cut to permit acting,” the department said in its decision, signed by Transportation Secretary Anthony Foxx. “[B]ecause of the extensive record, which reflects the novel and complex nature of this case, however, the Department does not find that the temporary exemption is appropriate or in the public interest.” The DOT said it will issue a “tentative decision” on the permit application once it completes its review.

The NAI application is opposed by several major U.S. and European airlines, U.S. labor unions, the European Cockpit Association, the European Transport Workers’ Federation and the Norwegian trade union Parat, according to the DOT. Supporting parties include FedEx, Atlas Air, the European Low Fares Airlines Association, the Washington Airports Task Force, the Broward County Aviation Department and Fort Lauderdale-Hollywood International Airport and the Greater Orlando Aviation Authority, among other groups. Airlines for America (A4A), the trade group representing major U.S. airlines, filed comments stating that DOT “should continue to pursue questions” regarding the application through a joint U.S. and European Union committee.

Norwegian Air Shuttle issued a statement urging the DOT to expedite its review of the air carrier permit application. “While we think it is unfortunate that DOT feels the need to further delay issuance of our permit, which has been pending now for over six months, Norwegian Air International stands behind its business—from its pilots and cabin crew to its affordable fare model to its desire to bring competition to the transatlantic market—and looks forward to receiving approval to operate without further delay,” said NAI chief executive Asgeir Nyseth.

The Air Line Pilots Association (ALPA), which has been prominent among unions opposing the NAI application, said the DOT’s dismissal of the exemption was a positive development. The department “took an important stand for fair competition today by denying NAI’s request for temporary authorization to fly to and from the United States,” said ALPA president Lee Moak. The ruling “puts the Norwegian Air International scheme on hold, but it doesn’t end the threat it poses to fair competition and U.S. aviation jobs,” he added. “The DOT must heed the call made from so many in Congress from both sides of the aisle, labor groups on both sides of the Atlantic, and the European Commission’s own labor-management organization and deny NAI’s application for a U.S. foreign air carrier permit.”


In summary, Article 17 of the US EU Open Skies Agreement states that labor standards, rights and principles shall not be undermined by parties to the Agreement.
The Norwegian business model makes extensive use of contract crew who are not employed by Norwegian. This model allows CEO Kjos to summarily terminate contract pilots and cabin crew for submitting any safety reports he or his cronies perceive as critical of the airline. Although there is legislation against such retaliatory and punitive acts, it is only applicable in an employer/employee relationship. Contract crews have no union representation with Norwegian because they are not employees of Norwegian.
The Norwegian business model permits circumvention of labor and safety laws, labor rights, principles and ethics. It categorically does not comply with Article 17. Additionally, the model creates a fear culture working environment, obstructing and not conducive to the promotion of safety - an essential element of air transport.