U.S. Transportation Agency Favors Norwegian Air Carrier Permit

 - April 15, 2016, 12:55 PM
Airlines and labor groups oppose allowing Ireland-based Norwegian Air International to fly to the U.S. (Photo: Norwegian Air Shuttle)

The U.S. Department of Transportation (DOT) has made a tentative decision to grant a foreign air carrier permit to Ireland-based Norwegian Air International (NAI), despite opposition by airlines and labor groups on both sides of the Atlantic. The department issued its finding to approve NAI’s application on April 15; the order gives objectors three weeks to respond.

In the show-cause order, the department “acknowledged that the labor-related concerns raised by NAI’s opponents warranted proceeding with caution and careful consideration,” the DOT said in a press statement announcing the filing. To give full consideration to the objections, it “took the unprecedented step” of formally consulting with two other federal agencies—the State Department and the Department of Justice Office of Legal Counsel.

“DOT’s show-cause order states that, based on the record as a whole, as well as its consultations with the Departments of Justice and State, the provision in the U.S.-EU Agreement that addresses labor does not afford a basis for rejecting an applicant that is otherwise qualified to receive a permit,” the department said. “In this regard, the order states that NAI appears to meet DOT’s normal standards for award of a permit and that there appears to be no legal basis to deny NAI’s application.”

Objections to the “tentative decision” are due May 6. The department said it will then review any submissions before issuing a final order.

NAI, a subsidiary of Norwegian Air Shuttle, originally applied to the DOT for a permit to operate to and from the U.S. on Dec. 2, 2013. The carrier also applied for an exemption to begin operations while the department assessed its application, which the DOT refused in September 2014.

Opponents allege that Norwegian Air Shuttle seeks to evade both Norwegian and international labor laws and pay pilots less by establishing NAI as a “flag of convenience” Irish airline. The permit application is opposed by numerous airline labor groups in the U.S. and Europe, as well as Delta, United and American airlines in the U.S., and Lufthansa, Scandinavian, Austrian and Air France-KLM in Europe. Parties supporting the application include cargo carriers FedEx and Atlas Air, the European Low Fares Airlines Association, the Washington Airports Task Force, Fort Lauderdale-Hollywood International Airport and the Greater Orlando Aviation Authority.

Reacting to the filing, the Washington, D.C.-based Air Line Pilots Association (Alpa) said the DOT’s preliminary ruling “exposes serious flaws in U.S. aviation policy.” Alpa, which represents airline pilots in the U.S. and Canada, alleges that NAI intends to use flight crews “hired on Singapore employment contracts” that pay substantially less than what Norwegian’s employees in Norway make.

“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 Tim Canoll, Alpa president. NAI “has picked its place of incorporation based on whether that nation’s tax and regulatory laws are favorable,” he added. “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.”