April 26, 2017

Bipartisan Bill Introduced to Protect U.S. Aviation Jobs from Unfair Competition

For Immediate Release:  April 26, 2017


Jen Gilbreath (DeFazio), 202-225-4472

Douglas Wagoner (Larsen), 202-226-9716

Bipartisan Bill Introduced to Protect U.S. Aviation Jobs from Unfair Competition

Washington, D.C. – Today, Ranking Member of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR), Chairman of the Subcommittee on Aviation Frank LoBiondo (R-NJ), Ranking Member of the House Subcommittee on Aviation Rick Larsen (D-WA), and Representative Drew Ferguson (R-GA) introduced legislation that would preclude the Department of Transportation (DOT)  from issuing a foreign air carrier permit for U.S. operations to an airline that exploits a “flag of convenience” to avoid the regulations of its home country.

On December 2, 2016, DOT issued a foreign air carrier permit to Norwegian Air International (NAI). NAI is “Norwegian” in name only, having established itself in Ireland to avoid Norway’s strong labor protections and employing crews on cheap short-term contracts governed under Singapore law.

“When the Department of Transportation granted Norwegian Air International’s permit, it guaranteed a race to the bottom in our transatlantic aviation market. Now, any airline can set up under a flag of convenience to exploit weak labor laws in other countries, save money, and undercut competition. Our bipartisan bill protects American jobs from predatory and unfair competition, and it protects the American flying public from deceptive flags of convenience,” said DeFazio.

“The Department of Transportation’s decision to grant Norwegian Air International a foreign air carrier permit was in direct contravention of the US–EU Open Skies Agreement to ensure airlines doing business in the US have strong labor standards,” said Larsen. “This bill would prevent DOT from issuing foreign carrier permits when airlines try to side step regulations and labor laws by setting up flags of convenience schemes.”

H.R. 2150, the Flags of Convenience Don’t Fly Here Act, prohibits DOT from issuing a permit to a foreign airline to serve the United States unless DOT determines that the foreign air carrier is not exploiting a “flag of convenience” by establishing itself in a country other than the country of its majority owner to avoid regulations. The bill also requires DOT to ensure that any new foreign air carrier permits issued to European airlines are consistent with the fair labor standards and fair competition requirements of the U.S.-E.U.-Norway-Iceland Air Transport Agreement.

DOT’s controversial decision to grant NAI a permit will encourage future opportunistic airlines to continue this race to the bottom in international civil aviation, threatening U.S. carriers’ ability to compete in critical international markets. Even the viability of the U.S. Civil Reserve Air Fleet, which the Department of Defense may call up during wartime to transport troops and materiel, could be in jeopardy.