Top Transportation Committee Leaders Urge DOT to Deny Norwegian Air Permit to Operate In United States
Washington, D.C. – Today, Representatives Peter DeFazio (D-OR), Frank LoBiondo (R-NJ), and Rick Larsen (D-WA) sent a letter to the Secretary of the Department of Transportation (DOT) urging him to deny Norwegian Air International (NAI) a permit to operate in the United States in violation of our Open Skies Agreement with Norway and the European Union.
“Norwegian Air’s overt practice of labor forum-shopping gives it an unfair competitive advantage in the transatlantic market. U.S. and other European carriers rightly adhere to the high labor standards that we and our European allies have 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. This matter remains an opportunity for the U.S. Government to stop this race to the bottom and to protect open markets and fair play. We urge the Department, in the strongest possible terms, to set aside the flawed tentative decision on Norwegian’s permit application and to deny the application,” the members write.
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. This airline, bearing the name “Norwegian,” has established itself in Ireland where labor and regulatory rules are weaker. It is expected to hire most of its pilots and flight attendants on individual employment contracts under non-European law in order to cut costs.
This operating model directly violates Article 17 bis of the U.S.-E.U.-Iceland-Norway Open Skies Agreement, which 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.–E.U. Agreement that address labor are not, on their own, a sufficient basis for rejecting an otherwise-qualified applicant. Granting permanent approval would allow NAI to undercut U.S. carriers who are following U.S. regulations and threaten the competitive balance of the transatlantic aviation marketplace.
DeFazio is the Ranking Member of the House Committee on Transportation and Infrastructure, LoBiondo is Chairman of the Aviation Subcommittee, and Larsen is Ranking Member of the Aviation Subcommittee.
A copy of the letter is included below.
April 27, 2016
The Honorable Anthony Foxx
Secretary
U.S. Department of Transportation
1200 New Jersey Avenue S.E.
Washington, D.C. 20590
Dear Secretary Foxx:
We respectfully urge the Department of Transportation (DOT) to set aside its tentative decision of April 15, 2016, concluding that Norwegian Air International is qualified to receive a foreign air carrier permit, and to deny Norwegian Air’s permit application. Norwegian Air is “Norwegian” in name only and relies on flags of convenience to subvert the fair labor standards of its home market. The DOT must not be complicit in such conduct.
Article 17 bis of the United States-European Union-Norway-Iceland Air Transport 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.” Unfortunately, it is our understanding that the Department has decided provisions in the U.S.–E.U. Agreement that address labor are not, on their own, a sufficient basis for rejecting an otherwise-qualified applicant.
Regardless of whether article 17 bis is an independent basis for denying a permit application, the grant of a permit to a Norwegian airline that holds an Irish air operator’s certificate and employs contract crews that are based in Thailand is clearly inconsistent with Norwegian and U.S. labor standards. No amount of legal gymnastics can get around the fact that Norwegian Air’s permit would be a permit to subvert fair labor standards.
Norwegian Air’s overt practice of labor forum-shopping gives it an unfair competitive advantage in the transatlantic market. U.S. and other European carriers rightly adhere to the high labor standards that we and our European allies have 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.
This matter remains an opportunity for the U.S. Government to stop this race to the bottom and to protect open markets and fair play. We urge the Department, in the strongest possible terms, to set aside the flawed tentative decision on Norwegian’s permit application and to deny the application. The public interest demands it.
Sincerely,
PETER DeFAZIO FRANK A. LoBIONDO
Member of Congress Member of Congress
RICK LARSEN
Member of Congress
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