April 27, 2016

Bipartisan Bill Introduced to Stop Short-Sighted DOT Decision to Allow Norwegian Air Operations in the U.S.

Washington, D.C. – Today, Representatives Peter DeFazio (D-OR), Frank LoBiondo (R-NJ), Rick Larsen (D-WA), and Lynn Westmoreland (R-GA), introduced H.R. 5090, legislation that would prevent the U.S. Department of Transportation (DOT) from permitting a foreign air carrier to operate between European countries and the United States unless the carrier complies with basic, fair U.S. or European Union labor standards. The legislation was introduced in response to the DOT’s tentative decision to grant a permit to Norwegian Air International (NAI). NAI established itself in Ireland, where labor laws permit the airline to hire its pilots and flight attendants on individual employment contracts under non-European law in order to cut costs.  NAI’s overt practice of labor forum-shopping violates our Open Skies agreement with Norway and the European Union and gives it an unfair competitive advantage in the transatlantic market.

“Consumers may purchase tickets on Norwegian.com and they may board planes marked Norwegian in big bold letters, but this airline is ‘Norwegian’ in name only. The DOT record shows that Norwegian Air International is headquartered in Ireland and employs contract crews based in Thailand to circumvent Norway’s fair and strong labor standards. It’s a virtual airline set up to undercut competition by exploiting cheap labor. Our bipartisan legislation sends a strong message to DOT—we must stop this race to the bottom, and protect the open and fair transatlantic aviation market,” said DeFazio.

“Norwegian Airlines has sidestepped the bedrock labor agreements that are the foundation of the US-EU Air Transport Agreement.  In so doing, they have compromised the competitiveness of American air carriers.  There has been long-standing opposition in Congress to permitting this to go forward.  The U.S. Department of Transportation must reconsider its position,” said LoBiondo.

“My colleagues and I have been clear with DOT that strong labor standards must factor into NAI’s air carrier permit decision. Today we are introducing legislation that would prohibit DOT from issuing a permit to NAI if doing so would undermine labor standards,” Larsen said. “Granting an air carrier permit to NAI would say to the world that the U.S. rewards other countries that break their commitments to protecting workers. Our agreements with other countries are only as strong as our ability and willingness to enforce them, which is why I am pushing hard for the U.S. to hold other countries accountable for their end of the deal,” said Larsen.

Article 17 bis of the U.S.-EU-Iceland-Norway Open Skies Agreement states that “[t]he opportunities created by the Agreement are not intended to undermine labour standards or the labour-related rights and principles contained in the Parties’ respective laws” and further requires that these “principles . . . shall guide the Parties as they implement the Agreement.” With the decision to grant temporary approval, DOT has decided provisions in the U.S.–EU Agreement that address labor are not, on their own, a sufficient basis for rejecting an otherwise-qualified applicant.

The bipartisan legislation introduced today would require the DOT to find that a permit is consistent with article 17 bis before issuing a permit, maintaining the competitive balance in the transatlantic aviation marketplace.

In 2013, NAI applied for a foreign air carrier permit to permanently operate in the United States. DOT granted tentative approval on April 15, 2016. Behind the NAI application is a global outsourcing business model that will put U.S. airlines and their employees at a competitive disadvantage.  U.S. and other European carriers rightly adhere to the high labor standards created through decades of hard work and commitment to a sustainable and socially-responsible aviation system. The point of Open Skies is to create an environment that fosters competition, not flags of convenience. 

Yesterday, DeFazio, LoBiondo, and Larsen sent a letter urging the Department, in the strongest possible terms, to set aside the flawed tentative decision on Norwegian’s permit application and to deny the application.