Norwegian - ALPA Intl. reagerer kraftig

Release #: 16.11
Date: April 15, 2016

DOT’s Norwegian Air Decision Exposes Flawed U.S. Aviation Policy

ALPA Will Continue Fight for U.S. Policy that Ensures Fair Competition for U.S. Airlines

WASHINGTON––Today’s U.S. Department of Transportation (DOT) order proposing to grant Norwegian Air International (NAI) a foreign air carrier permit exposes serious flaws in U.S. aviation policy that the Air Line Pilots Association, Int’l (ALPA) 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.”

Founded in 1931, ALPA is the largest airline pilot union in the world and represents over 52,000 pilots at 30 U.S. and Canadian airlines. Visit the ALPA website at www.alpa.org or follow us on Twitter @WeAreALPA.

 

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 theU.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.”